March 7, 2007
By DIANE LEVICK, Courant Staff Writer
MetLife is moving toward buying a CIGNA building in Bloomfield and consolidating 2,000 employees from several offices, raising the specter of a massive job loss from downtown Hartford.
A deal for MetLife to buy CIGNA's South Building hasn't been signed yet, but schematic drawings titled with MetLife's name have been filed with Bloomfield town officials for minor renovations of the facility.
Sources say MetLife has narrowed its interest to the Bloomfield building, though neither company would confirm that the CIGNA office is the one MetLife will buy. But MetLife spokesman John Calagna said Tuesday, "We're exploring our options, including the CIGNA building," and added, "I expect we'll be able to announce a deal before the month is over."
If the deal goes through, MetLife would move its roughly 1,310 employees from CityPlace I in Hartford, about 450 from Glastonbury, and 250 from Rocky Hill to Bloomfield. The Hartford employees were mostly from Travelers Life & Annuity, which New York-based MetLife bought in 2005.
The focus on Bloomfield dampens hopes in Hartford that MetLife would bolster its presence downtown by bringing the 700 Glastonbury and Rocky Hill employees to the city.
MetLife had said in January it was looking at several buildings for a possible acquisition: CityPlace I, CIGNA's South Building, and two other unidentified buildings in Hartford.
The loss of MetLife from Hartford's central business district would erase all recent commercial real estate gains in the downtown office market - and then some. The departure also might take away employees who could have been attracted to the hundreds of apartments and condominiums that have recently been built downtown.
In another upcoming loss for Hartford, CIGNA confirmed Tuesday it will move about 200 employees from CIGNA Investment Management offices at 280 Trumbull St. in Hartford to its Wilde building in Bloomfield when it is fully renovated. That move could be either at the end of this year or sometime next year.
Hartford Mayor Eddie A. Perez said Tuesday that he personally made two recent phone calls to MetLife - not to the chief executive - planning to say the city would do what it could to help the company stay in the city, but neither call was returned.
John Palmieri, director of Hartford's department of development services, had tried reaching out to MetLife multiple times, and the mayor's office also sent a note to a MetLife vice president in charge of corporate real estate in January but never heard back, said Matt Hennessy, Perez's chief of staff.
"The commitment and desire to negotiate was never there," Perez said Tuesday.
Other companies, including Aetna, have gotten city financial assistance to bring jobs here, and "we would have done something similar for MetLife if we knew what they needed," Perez said. "They're a private company and they have every right to do business the way they want to do business."
Hennessy said, "The real story in Hartford is we've seen significant investment from companies like Aetna, Travelers, and Prudential. ... They have all been working to bring jobs back to Hartford. We've done everything we can to keep large companies downtown."
Coleman Levy of the law firm Levy & Droney in Farmington, a lawyer with many real estate clients, said a MetLife exit from Hartford would be "an economic blow" to the city, not just to the CityPlace I landlord.
Companies deciding where to locate would weigh the benefits of being downtown and maybe stay even if they had to pay 50 cents or a dollar more per square foot than in the suburbs, Levy said.
"But when you start looking at the cost of parking and the real estate taxes [in Hartford], and it starts going to $2, $3, $4 and $5 a square foot difference, and if you have 100,000 square feet, that money drops right to the bottom line," Levy said. "It's not difficult to figure out what the end result is going to be."
MetLife occupies 373,000 square feet in CityPlace I.
MetLife contractors have applied to Bloomfield's building department for permits for an estimated $39,185 of interior demolition and $521,000 of renovations of "minimal selected areas" inside CIGNA's South Building. The permits, which are under review and not yet approved, would allow electrical and telecommunications cabling work.
CIGNA has been seeking to lease or sell the South Building and has been talking with "a number of businesses, including MetLife" that have inquired about it, said CIGNA spokesman Joe Mondy.
Mondy said the Wilde building renovations are on schedule to accommodate all South Building employees by year-end. Currently, the South Building houses information technology, marketing, and sales employees and serves as swing space for employees who are temporarily displaced by the Wilde building work.
Bloomfield officials, including Deborah Davis, the town's economic development director, are eagerly awaiting MetLife's decision.
"It will be a very positive and added value to our town," possibly increasing personal property tax revenue from new equipment in the building, Davis said.
MetLife's move would be healthy for existing Bloomfield businesses and may help spur creation of new small businesses, she said.
But in Hartford, a MetLife exit would offset recent gains in the real estate market, such as Travelers' recent lease of 300,000 square feet at State House Square and One Financial Plaza - the "Gold Building." That leasing pushed down the vacancy rate for prime properties in the central business district, and Travelers confirmed Tuesday it's looking for even more downtown space.
Commercial real estate experts said it isn't likely there would be a tenant who would want the amount of space that MetLife would vacate, but several tenants could eventually absorb it.
"It would take a fair amount of time for that to lease up," said Richard Mulready, president of Servus Brokerage Co., a leasing agent in Hartford.
The central business district has struggled to fill space from companies that are downsizing. With the Travelers leases, the downtown's office vacancy rate for prime, Class A space is now 12.5 percent. If the MetLife space were to come back on the market, it could jump back up to 18.5 percent, said Larry Levere, a broker at Sentry Commercial Real Estate in Hartford.
Lincoln National Corp. and some other firms have renewed downtown leases but with less space.
Reprinted with permission of the Hartford Courant.
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