Wetlands Agency To Discuss FedEx Proposal Wed Night

Reminder: FedEx's proposal to build a facility on the former Aetna property in Westfield is on the agenda for tonight's Inland Wetlands & Watercourses Agency meeting. The meeting is scheduled for 7pm in the city council chambers.

An 'open public forum' is also part of the meeting. A previous community meeting with the Westfield Residents Association was cancelled by FedEx. The public will be able to comment during the P&Z process as well, assuming the project progresses that far.

Press Release: Aetna Property Redevelopment Plan

Mayor Announces Plans for Redevelopment of Aetna Location

Tuesday, October 11, 2011

Mayor Announces Plans for Redevelopment of Aetna Location

Commercial Broker Hired to Market Property

Middletown, Connecticut: Mayor Sebastian N. Giuliano and Aetna announced today that Aetna has retained Cushman & Wakefield as the exclusive commercial broker for the former Aetna location in Westfield. The Mayor stated that over the past 2 years, the City, the Middlesex County Chamber of Commerce and Aetna have been strategizing and planning on the redevelopment of the 250 acre site at 1000 Middle Street.

Giuliano noted that the city will be working closely with Aetna, the Chamber and the State of Connecticut to find the ideal end use for the property. The site is a prime location for development; located in the center of the state, highway access and proximity to major northeast markets.

Larry McHugh, President of the Middlesex Chamber of Commerce stated, “I applaud Aetna for working so closely with the city and the Chamber to bring new jobs and investment to the site. The Middlesex Chamber is actively engaged in marketing the site and I have spoken with state leaders at the highest levels to make sure they are focused on this site.” Tom Handy, head of Aetna’s Real Estate Services, expressed that, “We (Aetna) continue to appreciate the collaboration that the Mayor, the Chamber and others have shown us throughout this process.”

Giuliano pointed out that Middletown’s Grand List, even without the Aetna building, is strong and diversified. He indicated that “the city must resist offers for less than ideal uses. We must have a long term perspective here, we can’t settle for less than ideal.”

Cushman & Wakefield is an international brokerage firm with over 13,000 worldwide employees, located in 231 offices throughout 58 countries. They have been charged with identifying the highest and best use of the site and marketing it to national and international companies and developers. The firm’s Executive Directors, Joel Grieco and Sean Duffy are spearheading the marketing effort and can answer questions relating to the offering.

From 1980: Proposal Would Give Aetna Tax Break

This article was published exactly 30 years ago today, in the Hartford Courant on February 21, 1980. It was written by Jon Lender.

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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.

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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.

Councilman Bauer Concerned About Potential Drop In Future Grand List

Councilman David Bauer is worried about a financial tsunami that could be even more damaging to the city, its grand list and its tax revenue then even the current crisis portends. When Aetna leaves Middletown for good, the financial impact could be devastating, Bauer claims.

"Two years from now we'll feel an impact of a $30 million decrease in revenue over five years," Bauer said Sunday. "Nobody's talking. I challenge anyone, the chamber, city hall, anyone who has a different interpretation of these numbers, to bring them forward."

In an email to city hall staff on January 16, Bauer says:

Correct me if I am wrong, but doesn’t Aetna contribute about $ 8 Million per year in property taxes. Your suggested course of action seems tepid at best. Were we hoping that the problem might go away if we ignored it? The Common Council has a fiduciary responsibility to the City and this potential revenue shortfall eclipses any other budget issue. I am stunned and insulted that hard information concerning our #1 taxpayer has been withheld.

I recommend immediate action by the Council, the Mayor, Finance Director, PCD Director, and whatever outside expertise we need to enlist, to deal with Aetna and this impending revenue shortfall.

They mayor's administrative assistant Geen Thazhampallath replied to Bauer the same day, writing:

Councilman: We assure you nothing was withheld and that the Mayor is working the multiple facets of the issue along with the Chamber President, Finance Director and P&Z Director with the highest levels of Aetna. We'll be happy to meet with you to share any facts and data we have.

Not satisfied, Bauer points to recent information published by Moody's Rating Service which states "Management does not expect an adverse financial impact from the reduction in Aetna Life’s operations." and Standard and Poor's which reports "City officials project that the property Aetna plans to vacate will be quickly redeveloped." Moody's and S&P determine the credit rating for the city.

"I'm really concerned," Bauer said. "And any property owner in Middletown should be concerned. The first thing we need to do is have a workshop. We all have to be working with the same numbers so we can understand the potential impact."

Bauer feels that the city has not moved on the problem with appropriate haste, but that proper planning now could prevent a disaster.

"If we encourage development, it could be a half billion dollar development. It's 250 acres of prime land, with good access to I-91."

Bauer is demanding an immediate workshop.

Bauer writes in an email to the Eye:

We need to actively plan to cover this likely shortfall in revenues or we face a variety of unpleasant possibilities – dramatic cutback of services or property tax increases. We have to face these likely scenarios before we can engage our State Legislative delegation and force every Gubernatorial candidate to take a position on this issue. This situation has another bad effect on the Westfield Fire District because Aetna contributes over 20% of the revenue to the District.