Aetna Picks Manhattan for New Home -- WSJ

By Joseph De Avila and Keiko Morris Features Dow Jones Newswires

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the US print edition of The Wall Street Journal (June 30, 2017).

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Aetna Inc. will move its corporate headquarters along with 250 jobs to Manhattan by late 2018, from Hartford, Conn., the latest company to abandon a smaller city for a major urban center.

The company said it chose New York as its new location to tap a more robust pool of talent at a time when Aetna is repositioning itself as a consumer-oriented health company.

"New York City is a knowledge economy hub, and a driver of the innovations that will play a significant part in our ongoing transformation," Mark Bertolini, chief executive of the company, said in a statement Thursday.

Aetna's departure from Hartford comes as the Connecticut is struggling with a spiraling fiscal imbalance that has led to a projected $5.1 billion budget deficit over the next two years. It is the latest big-name corporate loss for Connecticut after General Electric Co. left the state for Boston last year.

Aetna's new corporate office will be in a 170,000 square-foot Chelsea building being developed by Vornado Realty Trust and Aurora Capital Associates at 61 Ninth Ave. The nine-story office building, designed by Rafael Viñoly, will feature a terrace for each floor and is located not far from Alphabet Inc.'s Google office. Starbucks has signed a lease to take 20,000 square feet at the building for a megastore.

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The area around Aetna's new home was initially technology focused but the neighborhoods have begun attracting more mature and diverse corporations looking to recruit and attract high-level workers, said Paul Amrich, vice chairman at real estate services firm CBRE Group Inc. The High Line park, new residential development, retail and restaurants have added to its allure as a hip neighborhood, he said.

Aetna said it would continue to keep thousands of employees at its Hartford campus but said its commitment to Connecticut "will be based on the state's economic health."

"The company remains hopeful that lawmakers will come to an agreement that puts Connecticut on sound financial footing, and that the state will support needed reforms to make Hartford a vibrant city once again," the company said in a statement.

The city of Hartford is in its own financial straits, facing a $49.6 million budget hole. The city has asked the state for help and reached out to attorneys in May in case the city is forced to seek bankruptcy protection.

Aetna, along with two other major employers in Hartford, have said they collectively would provide of $10 million annually over the next five years to help the city avoid bankruptcy, as long as comprehensive changes are enacted to stabilize Hartford's finances.

"Connecticut has a long history with Aetna and we appreciate that thousands of their employees will continue to work and live here in the state," a spokeswoman for Gov. Dannel Malloy said.

New York Gov. Andrew Cuomo's administration has been negotiating the deal to lure Aetna for over two years.

New York state offered Aetna $24 million in performance-based tax credits over the next 10 years, according to Empire State Development, the state's economic-development arm. New York City also wooed the insurance company, promising $9.6 million in tax benefits.

Many of the 250 employees that will be working at the new New York office will be new positions, according to an Aetna spokesman.

Mr. Malloy previously said his administration offered to match any financial incentives any other state offered. Mr. Malloy also promised to improve transportation around Hartford and enhance workforce development.

Write to Joseph De Avila at joseph.deavila@wsj.com and Keiko Morris at Keiko.Morris@wsj.com

(END) Dow Jones Newswires

June 30, 2017 02:47 ET (06:47 GMT)