Back in 2014 General Electric announced it would bring its Global Operations Center to The Banks, a move designed to bring 1,800 workers to the then-struggling riverfront development and signal Cincinnati was open for business.
Cincinnati leaders, Hamilton County commissioners and state officials threw $112.4 million in tax incentives at the project at a joint meeting where there was applause and praise for what was seen as a major coup for Cincinnati. It was and remains the most lucrative job incentive package the city has ever offered.
A decade later, The Banks is grappling with the fallout of the unforeseen demise of the once-mighty conglomerate. Earlier this year, GE completed a restructuring that split it into three companies. Last winter, local GE operations exited The Banks for GE Aerospace headquarters in Evendale.
What's left behind: An 11-story, glass-facade building with three tenants totaling 600 employees that isn't even fully built out inside.
GE’s highest employment count in the building reached 1,440 in 2016, and decreased to 852 in 2019, its lowest year, according to city records.
Now, for the first time, the city is revealing details of a settlement it reached with GE related to its departure. The company agreed to nearly $43.5 million in concessions and a promise to find tenants to put at least 800 workers in the building, according to documents the The Enquirer obtained through a public records request.
A visit to The Banks last week at lunchtime showed GE branding remains on the building, with a handful of people coming in and out. At times though, the lobby was empty. For the most part, people eating in Taste of Belgium were dressed in shorts and T-shirts, seemingly there for the park and The Banks, not work.
Jean-Francois Flechet, who located one of his Taste of Belgium restaurants next to the GE building because of the promise of 1,800 workers, is frustrated.
“It’s a beautiful building, with amenities,” he said. “They should be able to lease it to a company that would occupy most of the building. I don’t understand."
A 'genuine testament to their commitment to Cincinnati'
Now, the city, The Banks and GE Aerospace are doing triage.
The city does not own the building, so it has no control over who it's leased to. It's owned by London-based 90 North Group, which did not return a message seeking comment.
The city's role, along with the county and state, was providing a tax incentive package to lure GE to The Banks so that the building would be built.
But the deal never created as many jobs as promised. Last June, the city sent GE a default letter, notifying the company that it had defaulted on deals that brought it about $15 million in tax breaks for The Banks building, according to Cincinnati officials.
That notice came to light after GE announced in November that the last of its jobs would be leaving The Banks building.
In the letter, City Manager Sheryl Long said the city expected a response in 15 days “explaining GE’s plan for curing these defaults.”
If GE failed to respond, Long’s letter said, the city might exercise its right to terminate the tax break agreements and require “repayment of foregone taxes.”
The letter set off settlement talks, which resulted in a settlement agreement signed March 6, which was not made public until now. The records acknowledge that GE invested $70 million in The Banks and agreed to nearly $43.5 million in concessions related to its departure.
The settlement calls for GE to:
Use "best efforts" to bring 800 jobs to the building via subleases.
Build out the fourth and fifth floors of the GE building and leave behind all furniture, fixtures and technology, worth an estimated $18.2 million.
Continue to pay promised tax money to Cincinnati Public Schools, worth $5 million.
Continue partner programs with Cincinnati State University and the University of Cincinnati, worth $15 million.
Give the Hamilton County Board of Commissioners $200,000, money to be used for a study related to finishing the build-out of The Banks.
Give The Port, the county redevelopment agency, $1.5 million, to be used toward The Port's industrial strategy and advanced manufacturing initiatives benefitting the Queensgate and Camp Washington neighborhoods.
Continue to donate to the United Way and ArtsWave campaigns, estimated at roughly $3.5 million.
While city officials acknowledge they would have preferred to keep GE and its thousands of jobs at The Banks, they believe the company acted in good faith.
“The initial investment and agreement GE made with the city years ago represented a true and genuine testament to their commitment to Cincinnati. ... Much of what happened that brought us to this position of change was unpredictable back then,” Markiea Carter, the city's director of economic development, said in a statement to The Enquirer.
In another statement, GE Aerospace said it's doing right by the city following its restructuring. Company officials also stressed the manufacturer's decision to remain and increase investment in the region. In its final moves after spinning off other divisions, GE assumed the name of the remaining business, which makes aircraft engines.
“We are proud of our 75-year history in this community, and we are pleased to have reached a mutually-beneficial agreement that demonstrates our continued commitment to the Greater Cincinnati region and enables the building to be more fully utilized,” the company said.
General Electric completed its restructuring in April with the spin off of its former energy business intoGE Vernova, now a stand-alone business based in Atlanta. The move marked the end of a years-long winding down of the storied Boston conglomerate. After more than a decade of struggles, GE announced its plan in late 2021 to split itself into three separate companies. In 2023, GE spun off itshealth carebusiness.
While GE Aerospace has cut back on office space, in March GE announced plans to beef up its manufacturing capabilities with $107 million worth of investments in Greater Cincinnati plantsas part of a larger $650 million infusion into its worldwide manufacturing and supply chain operations.
'Best efforts' to 'live, work, play' downtown
Still, GE's exit from the city's premier riverfront property has stung local leaders who bet big on the company's future. Adding a big employer's office was supposed to be the missing piece to the sprawling mixed-use development's embodiment of a "life, work, play" mission.
“Cincinnati’s Downtown benefits greatly from the fact that we have such committed corporate partners, including so many Fortune 1000 companies,” Kathleen Norris, principal of Urban Fast Forward, a Cincinnati-based urban planning and real estate company, told The Enquirer. “Losing any one of these is a dent to our pride at the very least. But that’s a great building in a fantastic location. I think it will backfill very strongly.”
Still, backfilling depends on GE Aerospace's new agreement to the city to "use its best efforts" to sublet the space to tenants who will employ 800 workers with an annual payroll of $40 million. That's a far cry from the 1,800 high-powered GE jobs that were going to pay more than $100 million.
Brendon Cull, the president of the Cincinnati Regional Chamber, said despite the outcome at The Banks, the region will benefit from GE's restructuring.
"The big picture matters. After significant changes to the company’s way of operating, Cincinnati wins as the HQ for GE Aerospace, building on a 75-year investment here," Cull said. "GE is a tentpole of our regional economy, creating jobs and attracting suppliers, and this has worked out in a manner that’s clearly favorable to our city and region."
Officials with the Regional Economic Development Initiative (REDI) Cincinnati, which seeks to attract and retain jobs in the region, deferred the matter to GE Aerospace and the city.
"REDI does not have any insights into the conversations between the city of Cincinnati and GE Aerospace," REDI spokesman Jay Brock said.
Meanwhile, restaurant owner Flechet feels twice-burned by The Banks, having previously gambled on a café at the National Underground Railroad Freedom Center that had to close when it didn't draw patrons.
The Banks location is Taste of Belgium's poorest-performing site due to its high rent and scant nearby employment. The restaurant doesn't even see many workers from the sublet spaces in the former GE building, Flechet said.
“I swore I would never go back to The Banks because it was such a traumatic experience,” he said. “Then they said GE was coming with 1,800, high-paying jobs. That was the game changer."
But, he said, "It’s been going down over the years (at the GE building), and with COVID in between, it’s been rough there. We don’t really see anyone coming in throughout the day.”
Subleasing it, he said, is better than nothing, but it “kicks the can down the road of a quality tenant.”
This article originally appeared on Cincinnati Enquirer: GE left The Banks, but Cincinnati clawed back $43.5M
