By Joseph De Avila
General Electric Co. on Monday said it sold its former global headquarters in Fairfield, Conn., to Sacred Heart University for $31.5 million.
The move allows Sacred Heart, a Roman Catholic school with about 8,500 students, to expand, but it will result in significantly lower tax revenue for the Connecticut town, where GE opened its suburban office park in 1974.
GE, citing Connecticut's rising taxes, said in January that it would move to Boston. It said it was pleased to sell its campus, which spans more than 60 acres, to Sacred Heart, calling it "a world-class local university."
Sacred Heart's existing campus isn't far from the old GE site, and the university's president, John Petillo, said the purchase lined up with its expansion plans.
"It's literally walking distance from our campus," he said. "We've had tremendous growth in the last five years. And the one thing they don't make more of is land."
Mr. Petillo said the university would keep and refurbish the old GE buildings. Sacred Heart can add about 450 students and up to 60 jobs over the next four years with the new space.
The university plans on expanding its new computing school, which it opened this year, at the site. It will also move part of its Jack Welch College of Business, named after GE's former chief executive, there as well.
The deal is a mixed bag for Fairfield, said Michael Tetreau, the town's first selectman.
GE paid the town $1.6 million a year in property taxes on an assessed value of about $80 million, Mr. Tetreau said. The townstands to lose most of that, he said, because as an educational institution Sacred Heart won't have to pay property taxes.
He estimated that Connecticut would reimburse Fairfield for about $400,000 in lost property taxes.
"On the one hand, I see the benefits to Sacred Heart for their future growth and expansion, and that's a good thing for our community," Mr. Tetreau said. "On the other hand, from a pure financial standpoint, we are losing over $1 million in tax revenue, and that causes serious concerns going forward."
Mr. Tetreau said Fairfield would likely have to attract new business, cut spending and raise property taxes to offset the loss.
Mr. Petillo said Sacred Heart paid the current market rate for the property. The university's expansion will drive new business to the town, expanding economic growth there, he added.
Write to Joseph De Avila at email@example.com
(END) Dow Jones Newswires
November22, 2016 02:49 ET (07:49 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.