New York City cancels incentive package for Aetna's headquarters move

The de Blasio administration has canceled the $9.6 million incentive package Aetna was offered to move its headquarters from Connecticut to the Meatpacking District, Crain's has learned.

The Economic Development Corp. said the incentives were nixed because the relocation is not moving forward. It is unclear what will happen at the space where Aetna signed a lease, a boutique office building being developed by Vornado Realty Trust and Aurora Capital Associates.

In June, the city and state announced incentive packages largely consisting of tax breaks worth about $35 million combined over a decade in exchange for Aetna occupying 145,000 square feet at 61 Ninth Ave., which amounted to all of the building aside from the retail space. The company was set to bring 250 senior employees to the property and invest $84 million there. With an asking rent of $150 per square foot, the property was one of the most expensive in the city.

In early December, however, the insurance giant was acquired by CVS, triggering speculation that the newly merged company might not continue with the relocation.

Aetna would confirm neither the cancellation of the incentive package nor any future plans for the Meatpacking District location or its Hartford headquarters.

"All Aetna locations will be evaluated during the integration planning process," a company spokesman said in a statement.

Empire State Development, the state's economic-development arm, had offered Aetna $24 million in tax breaks over 10 years for the move. A spokeswoman for the agency said all of the breaks are performance-based, so Aetna would need to meet milestones agreed to over the summer to receive them.

The cancellation of the incentive package doesn't mean the insurer is off the hook for the space, for which it has already signed a lease. What the company will do with it remains to be seen.

With reporting by Daniel Geiger.

"City cancels incentive package for Aetna's headquarters move" originally appeared in Crain's New York Business.