The building blocks have been laid for another major company to set up shop in Boston.
The Lego Group on Tuesday announced that it would move its North American headquarters from Enfield, Conn., to Boston over the next few years, a transition expected to bring hundreds of jobs to Massachusetts at a time when concerns are mounting over the state’s ability to compete for big business.
But much as companies that moved to Boston before the COVID-19 pandemic, Lego executives said they were drawn here by the region’s talented workforce.
“As we have been continuing to grow the business especially over the last five years, it’s become more and more evident to us that we could grow potentially even faster by being located closer to where the more talent is living,” said Skip Kodak, president of the Lego Group in the Americas.
The toymaker is prepared to bring all of the approximately 740-odd full-time employees it has in Enfield — located along the Massachusetts state line between Springfield and Hartford — to Boston, offering relocation assistance to those who choose to transfer.
“Realistically, I think the number will be less than that,” said Kodak, but he added he expects the workforce will grow once in Boston. “We’re also giving people a year with all of the support that we have in front of them to make their choice.”
“As we continue to grow the business, really the bottom line for all departments is there’s going to be growth,” he added.
The move will begin in 2025 and complete by 2026. The company has yet to choose a location for its Boston offices, but Kodak said they are “looking in the city proper” in a place easily accessible to public transit. He expects Lego will reveal the location by the end of September.
In a statement on Tuesday, Mayor Michelle Wu hailed the news, and what it signals about Boston.
“I look forward to supporting LEGO Group as they transition their headquarters to Boston and join our mission to become the most family-friendly city in the country,” she said. “This news finally has my kids impressed.”
Compared with some longer, higher-profile corporate relocations, Lego’s move happened relatively swiftly.
Conversations between the company and state officials began in early December, the governor’s office confirmed, with City Hall looped in around Christmastime. Segun Idowu, Boston’s chief of economic opportunity and inclusion, said that by the time the company spoke with them, the deal was all but sealed. The city offered Lego no financial incentives for the move.
“Companies are making difficult decisions about how much space they’re securing and what future leases look like,” said Idowu, “For a company to say, ‘Because of the talent, because of the transportation, because of the housing, because of the priorities of the administration, this is ideal for us and we’re going to take up a lot of space,’ I think it’s encouraging.”
Idowu said the city would help Lego find a good location “downtown.” The site itself will depend on how much square footage Lego needs. The company currently employs a hybrid work model that may reduce its space needs, said Alia Hamada Forrest, director of business strategy in Idowu’s office.
“It could be 50,000 square feet,” she said. “It could be less, it could be more.”
The move comes at a time when downtown Boston’s office vacancy rate is higher than it has been in decades, with sublease space also spiking. A recent report from real estate brokerage Colliers labeled Boston “firmly a tenant’s market,” which means Lego will have multiple options in many neighborhoods to look for headquarters.
The company’s North American education unit is already based at 501 Boylston St. in Back Bay, which currently advertises 158,000 square feet available on its website. Across the street, at the 500 Boylston/222 Berkeley office complex, e-commerce furniture manufacturer Wayfair put a large block of space up for sublease as part of cutbacks this fall.
If Lego chooses to keep its presence in Back Bay, it will have plenty of places to choose from, said Meg Mainzer-Cohen, executive director of the Back Bay Association.
“Back Bay doesn’t have a huge vacancy rate,” she said, “But I do know that there’s a cyclicality there and that there’s always supply coming onto the market.”
Lego’s Enfield headquarters houses sales, marketing, finance, operations, and planning teams, as well as the contact center, the creative in-house agency for the Americas, and a group dedicated to creating 3-D life-size models of the famous multicolored toy blocks.
During the transition to Boston, employees will continue to work in Enfield and the Lego Education office here. All new hires from this point forward, said Kodak, will be based in Boston.
Connecticut Governor Ned Lamont also weighed in on the decision, releasing a statement expressing his disappointment over the move.
“Based on my conversations this morning with LEGO’s leadership, their move is motivated not by any Connecticut policy but rather LEGO’s desire to consolidate their business operations near the company’s Education Office and to enhance their partnership with MIT,” Lamont wrote, adding that the state would assist any workers who choose not to follow the company to Massachusetts.
The state will assist in recruiting workers through MassHire, the governor’s office said, while Idowu added that the phased-in move gives plenty of time to ”create pipelines for Boston residents to careers within the company.”
Lego already has several footholds in Boston. Along with the Lego Education office, which moved from Kansas in 2016, the company has its Legoland Discovery Center in Somerville’s Assembly Row, which will reopen this spring following $12 million in renovations. Lego has also collaborated with the MIT Media Lab since 1985, said Kodak, and on the philanthropy side, has worked with the Boys & Girls Clubs of Boston through Lego Education.
The Enfield facility has been open since 1975, when it was designed as the heart of the manufacturing, packaging, and distribution operations for the Americas. By 2007, however, the 230-acre campus had been sold and those operations had moved south to Mexico, Texas, and Tennessee. Enfield downsized, becoming office space.
Now those offices are coming to Boston, where Kodak said the company aims to lay down significant civic and philanthropic roots, much as it has in communities around Enfield.
“I would expect us to be investing in and looking for opportunities — not to copy and paste what we’ve done in metro Hartford and Springfield — but to learn from what we’ve done and find those opportunities in Boston,” he said.