July 29, 2006
By DIANE LEVICK And KENNETH R. GOSSELIN, Courant Staff Writer
In more good news for Hartford and its insurance industry, Aetna said Friday it will bring about 3,600 workers to the city from its Middletown office by 2010 as part of a $219 million renovation and consolidation project.
Aetna, which has about 2,800 employees in Hartford now, expects the transfers to increase its workforce in the city to as many as 6,400 people by 2010.
A new nine-level Flower Street parking garage and renovations to its headquarters buildings are part of the project.
The move - rumored for months - is the result of ING Group's decision to vacate the Tower Building at Farmington Avenue and Flower Street, which ING leases from Aetna. The Dutch insurer, whose lease expires at the end of 2007, plans to transfer 2,000 employees to a $100 million building under construction in Windsor.
Aetna expects to leave 150 to 200 employees in the data center it owns at the Middletown complex beyond 2010. Hundreds of workers now at the complex would move to one or more undetermined locations in Connecticut.
Aetna's upcoming move of jobs to Hartford is certainly a "strong vote of confidence" in the city, said Edward J. Deak, an economics professor at Fairfield University. "It helps to reinforce Hartford, if not as the Insurance Capital, at least as an important player in the industry."
The company's decision to keep the jobs in Connecticut rather than moving them elsewhere is good news too for the state, which has struggled to keep, let alone create, new jobs, Deak said.
"Not only will good-paying jobs be retained and added in Hartford, but the projects Aetna is undertaking will provide new construction work as well," Gov. M. Jodi Rell said.
Middletown officials said the move isn't a surprise, but raises uncertainty about how easily the jobs can be replaced and what will become of the complex, which was built for $145 million on a 287-acre parcel and opened in 1983.
Aetna is considering redeveloping the Middletown site after its lease on the main building expires in 2010. The company owns the land, and one possibility is to buy the 1.3 million square-foot building, tear it down, and build something else.
Company spokesman Fred Laberge said no decisions have been made, and he declined to speculate on what might replace the Middletown building if it were demolished.
Aetna, which has been growing since a successful financial turnaround, has been consolidating office space around the country to reduce expenses and help protect profit margins.
News of Aetna's boost for Hartford employment follows The St. Paul Travelers Cos.' confirmation on Monday that it will add 500 jobs in the Insurance City and another 100 in Windsor over the next two years.
The jobs Aetna is bringing to Hartford are existing positions. However, the company has added more than 400 jobs in Connecticut over the past three years and said it could increase employment here even more if business continues to grow.
In connection with the Middletown move, Aetna will get about $9 million in tax relief from the state in return for a pledge to keep at least 7,000 employees in the state for five years.
That is fewer than the 7,700 employees Aetna currently has in Connecticut. Aetna's Laberge assured "that doesn't signal anything," such as layoffs. "This agreement provides for a minimum threshold. It's not a target," he said.
Aetna has about 4,500 employees in Middletown and about 300 workers there from IBM under an outsourcing contract. With 3,600 people moving to Hartford and up to 200 staying in Middletown, the company will still need to seek space for up to 1,000 others. They will stay in Connecticut, but it isn't known yet where they will be.
Aetna also has about 350 employees in Windsor and 100 in Norwalk.
The company is Middletown's largest taxpayer by far, paying $194.5 million in personal-property taxes in 2005. Aetna noted that its data center, which the company is keeping there, represents nearly half of the taxes it pays to Middletown.
Middletown Mayor Sebastian Giuliano said Friday, "We're going to feel this, but if they keep the data center - there's a lot of value there. They'll remain one of our big taxpayers."
Giuliano voiced hope that workers would leave Middletown gradually, and that there wouldn't be a mass exodus as 2010 approaches.
"The quicker we can get a marketing plan ready, the less of an impact it's going to have on us," Giuliano said. "This is a great location that will be desirable for many commercial uses, but if they move 3,000 people, that's going to be difficult to replace."
Aetna said the move of Middletown employees will be gradual, starting in 2009 and accelerating with the approach of its lease expiration.
The Middletown building "is designed for a single user, so something would have to be done to it" if it is to be marketed to other prospective tenants, said Lawrence McHugh, president of the Middlesex Chamber of Commerce. "We'll see how it shakes out."
McHugh said well over 1,000 of the Aetna workers live in Middlesex County and would likely remain after the workforce shift. "The commute's nothing - 15 minutes," he said.
Many of the employees will be moved to Aetna's Tower Building in Hartford, which ING is vacating, while others will occupy extra space in Aetna's older headquarters building on Farmington Avenue.
As part of the project, Aetna will build a parking garage on the east side of Flower Street in 2007-08 with room for about 1,200 cars. Aetna has arranged to buy small pieces of property from The Hartford Financial Services Group and the YWCA for the garage. A pedestrian bridge over Flower Street is proposed to connect the garage with the Tower building.
By 2009, Aetna expects to demolish and rebuild its existing corporate ramp garage.
In addition, Aetna struck a deal with the city of Hartford so it can expand its surface parking. Hartford Mayor Eddie A. Perez said Aetna will pay the city about $1.2 million to wipe out the tax liens on the Hawthorn and Laurel Street lots and will then buy them at a discount.
The city first approached Aetna about 18 months ago to talk about options for expanding in the city, which included the city-owned parking areas that were part of Friday's announcement.
Thirty-six hundred jobs "is a great number, and my hope is that we can get other companies to do this," Perez said. "This is a confidence builder for other companies. If Aetna does it, other companies might do it, too."
Courant Staff Writers Jeffrey B. Cohen and Josh Kovner contributed to this story.
Reprinted with permission of the Hartford Courant.
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