AUTHOR: Jon Chesto
DATE: June 21, 2016
Five months after General Electric Co. said it would move its corporate headquarters to Boston, the city can now boast about the arrival of another major player in the energy industry with the relocation of French conglomerate Veolia’s North American headquarters from Chicago.
The company’s move, which is set to be announced Tuesday, follows the promotion of Boston executive Bill DiCroce in February to be CEO of Veolia’s North American operations, leading a workforce of about 7,800 people.
The number of net new jobs in Boston isn’t particularly large: DiCroce said he expects to add 50 jobs over the next several years to the roughly 250 already in and around Boston. Most of those will come from transfers from Chicago to Veolia’s existing offices in the Exchange Place tower at 53 State St. In comparison, General Electric will add hundreds of jobs in Boston following its decision to relocate its headquarters from Fairfield, Conn.
That said, Veolia’s move is important as officials in the region seek to promote the area as a hub for “clean energy” businesses. Veolia specializes in operating water and sewer systems for municipalities. The company, which generates more than $2 billion in annual revenue from its North American operations, has also become a major player in hazardous waste treatment services as well as self-contained energy networks such as the labyrinth of steam pipes that it runs through the heart of Boston’s downtown.
“Attracting someone like Veolia on the heels of GE is very positive,” said WindSail Capital Group managing director Ian Bowles, whose Boston firm provides financing for clean-tech firms. “It further cements Boston’s leadership role in these low-carbon industries. It’s a company that a lot of startup businesses working in water or thermal energy ... would want to know.”
Veolia already employs about 700 people around the state, DiCroce said. The company’s highly visible local facilities include the Kendall electricity-and-steam plant in Cambridge, along the Charles River, and the steam plant on Kneeland Street, near South Station and overlooking the Southeast Expressway.
“They have, for quite a while, been deeply involved in the innovation culture here,” said Stephen Pike, the interim CEO of the Massachusetts Clean Energy Center, a quasi-public agency. “This is just another . . . acknowledgment of the strength of that culture.”
DiCroce joined Veolia in 2008 after a career that included stints with NStar (now Eversource) and the Pilgrim nuclear power plant. He said he decided quickly after becoming CEO that he wanted the corporate team to be here, in part because Boston is seen as an innovation hotbed.
“We’ve let everybody know that your career path, your center of gravity is Boston,” DiCroce said. “This hub will continue to grow and we’ll draw more people here.”
He also likes Boston’s appeal to potential recruits: The city’s walkable neighborhoods and vibrant nightlife have made it easy to attract talent.
“If I’m trying to lure people to come to work with us, and I say ‘Boston,’ I get a ‘yes’ pretty quickly,” DiCroce said.
The move will provide some cost savings, in terms of personnel and real estate expenses. For example, DiCroce said Veolia will sub-lease its office space in Chicago’s Aon Center tower — Veolia’s North American corporate home since 2008.
Unlike GE, Veolia won’t receive any financial incentives from the city or the state for the move, according to a company spokesman.
Among DiCroce’s big challenges as CEO will be to identify major acquisition targets, such as the $325 million purchase unveiled earlier this month of a sulphur recycling business from DuPont spinoff Chemours. He said he’s on the hunt for others, including a possible acquisition of an energy management firm.
‘Attracting someone like Veolia on the heels of GE is very positive. It further cements Boston’s leadershp roles in these low-carbon industries.’
Ian Bowles, WindSail Capital Group managing director
DiCroce is also a player in what could be one of the biggest downtown real estate deals. Veolia has teamed up with the state Department of Transportation to sell land along Kneeland Street for redevelopment, including the old steam plant. The steam plant would be torn down and replaced with a more modern plant that could be built within a new building at the site.