Pharmacy chain CVS has confirmed it will keep Aetna’s headquarters in Connecticut after the two companies merge, nixing a plan to move workers to New York City.
Aetna had announced last year that after 130 years in Hartford it intended to move 250 headquarters staff to lower Manhattan sometime in 2018.
But then the tie-up with Rhode Island-based CVS was announced, and the relocation talk went quiet. So quiet in fact, that this week New York City officials rescinded their offer of $9.6 million in tax breaks.
Greg LeRoy runs Good Jobs First, a nonprofit watchdog that monitors economic incentive deals.
“New York City is right to be wary of any company going through a merger,” he told WNPR. “It’s axiomatic in economic development that mergers create job loss, because companies have duplicative functions and they shrink. Expecting a merging company to create jobs is often a fool’s errand - it’s not going to happen.”
And in fact it seems now that New York had inside information. CVS issued a statement Friday, saying “we have no plans to relocate Aetna’s operations from Hartford and, in fact, view Hartford as the future location of our center of excellence for the insurance business.”
Greg LeRoy said relocations are pretty much always decided by the company’s internal politics, and not by tax breaks.
“This is the dirty big secret of economic development incentives,” he said. “They almost never determine where a company chooses to expand or relocate. And that’s true because they can’t - because they’re too small.”
The chief executive of CVS met this week with Hartford Mayor Luke Bronin. It’s a big deal for his city. About 4,000 of Aetna’s 5,800 Connecticut workers are based in Hartford.
