The city would cut Aetna Life and Casualty Co.'s taxes on its proposed coporate [sic] offices here for seven years under the agreement negotiated by the mayor.
The tax-discount program negotiated by Mayor Michael J. Cubeta Jr. calls for Aetna to pay 40 percent of its tax bill on the buildings during a seven-year period beginning with completion of the first construction phase in 1983.
During those seven years, Aetna would pay 50 percent of its property tax bill on the 287 acres, which the company plans to buy later this spring.
It would pay the full bill on personal property, such as office furniture and business equipment, during that period. Once the seven years ended, Cubeta said Wednesday, Aetna would pay its full share.
Spokesmen for both Republican and Democratic Common Council delegations said Wednesday, after Aetna's formal announcement of expansion plans at a Hartford press conference, that they expect the council to approve the tax break shortly.
Aetna plans to build offices for 4,000 group insurance division employes [sic] on 287 acres in the Westfield section at a 900,000-square-foot complex, which would be the initial construction phase ending in 1983. Once those employes were moved here in 1983, construction would begin on the 300,000-square-foot second phase.
Total construction cost would be $90 million. Another 1,000 employes would be added to the local payroll by the end of the decade, Aetna officials said Wednesday.
The agreement negotiated by Cubeta and Aetna would give the city an estimated $10 million in taxes during the next 10 years. The city's annual tax levy this year was $16.7 million.
The state plans to widen Rt. 72 to accomodate [sic] the expected commuter traffic off exit 21 from I-91 and is considering renovations to the Berlin train station, state Economic Development Director Edward Stockton said Wednesday.
"The potential benefits of increased employment and tax revenue warrant the support of all residents. Middletown is fortunate to have this opportunity to expand our tax base by welcoming a successful and stable corporate citizen," Cubeta said.
The land, on which Ronald H. Mooney of Forest Hills, N.Y. had hoped to build the state's first horse racing track, is under option to Aetna. The site was selected because of its accessibility and the potential of the Middletown area's labor market, Aetna spokesmen said.
There is a striking contrast between the tax deal struck with Aetna and the tax deal struck with Kleen Energy. The Aetna abatement was a 7 year break on the proportion of assessed value which would be taxed--the assessed value and the mill rate were each set every year in the same manner as is done for every other property owner, both the assessed value and the mill rate could (and did) rise even during those 7 years. Kleen Energy, in contrast, was given a 25 year schedule of fixed tax payments, so that the Kleen Energy property owners would see no increase in their tax payments, even if the value of the property rises, or the mill rate charged to all other property owners in the city increases.
Here are the October 1, 2009 values for the major properties and taxes for the Aetna land and buildings (there are some additional, smaller tax payments on the parking deck, bridges, and other items).
- Land. Assessed value: $14.9M; taxes: $381,000 per year.
- Headquarters Bldg. Assessed value: $71.2M; taxes: $1.8M per year.
- Data Center. Assessed value: $18.1M; taxes: $461,000 per year.
Aetna announced last year that they would vacate their Middletown office, this will be completed by March of this year. However, the city will continue to collect taxes on the building and land until June 30th, 2011 (property owners pay annual taxes beginning on July 1st, on the assessed value of the previous October 1st). Aetna has no plans to move their Data Center, so will continue to pay taxes on that building.