A tale of two companies
What GE and Wynn Resorts bring to the table
STEVE WYNN MUST BE CRYING in front of his Picasso reading about the efforts of state and city officials to bring GE to Boston.
The so-called Summary of Incentives agreement signed by GE CEO Jeffrey Immelt, Gov. Charlie Baker, and Boston Mayor Marty Walsh might as well have been written on red carpet.
The state agrees to provide $120 million for infrastructure improvements, $1 million for workforce training programs, $5 million for a GE innovation center, and $25 million for street, transit, bikeways, and water transportation in the Seaport District. The city is offering $25 million in tax relief over 20 years and $100 million in city-financed improvements to the Seaport District, including a refurbished Northern Avenue Bridge.
GE also gets parking spots for a jet and a helicopter at Logan International Airport, a hangar for six corporate jets at Hanscom Airport, and state and city support for a commercial helicopter pad in Boston.
What Wynn Resorts has received, in contrast, is a pile of litigation and demands that the company cough up millions of dollars to address traffic issues around its proposed $1.7 billion casino, which will be located just over the Boston line in Everett. State officials have awarded Wynn some key permits, but they haven’t done much else. Mayor Walsh and Steve Wynn have bickered repeatedly in public. Walsh has filed two lawsuits seeking to block Wynn’s casino and Wynn has filed a libel suit targeting the mayor’s administration.
Wynn Enterprises, of course, is not in General Electric’s league either financially or in terms of image. GE is ranked No. 8 on the Fortune 500, a company regarded as one of the leaders of the innovation economy with the potential to give birth to other high-value, knowledge-economy businesses. It’s the sort of business that politicians dream about having in their backyard.
Wynn Resorts is ranked 477 on the Fortune 500 and its business of hotels and casinos is something many politicians view with caution. Casinos are heavily taxed, in the same way that alcohol and tobacco have “sin taxes” attached to them. There is frank acknowledgement that casinos bring not only revenue and jobs but problem gambling and heavy traffic.
Still, Wynn Enterprises was awarded a casino license under a state law that was embraced by nearly two-thirds of state residents. Like GE, Wynn initially inquired about building a casino near the Boston Convention and Exhibition Center. The administration of former mayor Thomas Menino, who favored a competing casino developer’s proposal, reportedly told Wynn to move along. Wynn flirted with Foxborough and other sites before eventually ending up on an ugly, polluted, vacant stretch of land along the Mystic River. The company plans to spend $30 million cleaning up the property and has hired Suffolk Construction to build its hotel and casino.
For a city recently ranked No. 1 in income inequality, Wynn plans to hire 4,000 permanent employees who will earn an average salary of about $51,000. GE is bringing 800 jobs to Boston with an average salary above $100,000.
GE has a track record of paying little or no taxes. A group called Citizens for Tax Justice says GE paid no Connecticut income tax in 2014 and a total of $530 million over the five-year period from 2010 to 2014. Wynn is required to pay 25 percent of its revenue to the state in taxes, an estimated $1.25 billion over the first five years of operation.While the city and state are committing more than $125 million to address traffic congestion in GE’s new neighborhood in the Seaport District, no similar commitments have been made to address traffic issues at Charlestown’s Sullivan Square, an existing bottleneck just down the street from the Wynn casino. Wynn officials say they have set aside nearly $36 million to address traffic issues at Sullivan Square, and will also spend another $650 million over 15 years on traffic and other mitigation efforts in the area. Boston officials have said the proposed casino and its accompanying traffic are incompatible with Charlestown’s plans for a quieter, residential area near the Wynn site.
Back in July, in a conference call with financial analysts, Wynn remembered the days when Massachusetts voters blocked a bid to repeal the state’s casino law by a 60-40 margin and Everett voters supported his project by an even wider 86-14 margin. “The tables seemed to be set. The welcome mat seemed to be out,” he said. “We just haven’t found the welcome mat yet.”