When CVS Health Corp. acquired Aetna Inc. in 2018, the pharmacy giant agreed to keep the health insurer’s headquarters in Hartford for at least a decade and create a center of excellence around its new insurance business.
But in the past two years, hundreds of layoffs affecting Hartford and its massive headquarters campus in Asylum Hill have raised concerns about CVS’s long-term corporate presence in the city. And a recent review of city records shows a decline in assessed value of personal property, while the combined company is in the midst of a dramatic, cost-cutting initiative nationwide.
As a result, the taxes paid on office equipment, computers and technology dropped by more than 35% over the past four years.
The decline in assessed value of equipment at the Aetna campus at 151 Farmington Ave. meant personal property taxes collected by the city fell to $2.5 million at the end of 2024 from about $4 million in 2020 to about $2.5 million in 2020.
Personal property taxes are separate from the taxes paid on the real estate that encompasses the 1.7-million-square-foot campus, a cornerstone of the Hartford’s insurance industry since the 1930s.
While normal depreciation may account for some of the personal property decline, some say it is an indication that CVS’s efforts are focused elsewhere as it deals with its troubled acquisition of Aetna that has been dogged by soaring medical costs.
“That campus is a concern,” Michael W. Freimuth, executive director of the Capital Region Development Authority said. “Like Pittsburgh losing steel plants. it has been impacted by an unholy trinity: short end of a corporate merger, Covid-related remote work and medical costs eating up corporate margins leading to reduced overhead.”
Freimuth, who heads the quasi-public state agency, said two of his biggest concerns in Hartford are the future of the Aetna campus and Constitution Plaza, much of which is mired in foreclosure and receivership.
“That’s a big piece of real estate,” said Freimuth, whose agency has helped finance office-to-apartment conversions in the city for more than a decade. “It’s a little bit difficult to figure out repurposing that. And the buildings are of different ages, different types of structures and different historical significance.”
Aetna’s roots in Hartford stretch back to its founding in 1853. The insurer’s Colonial Revival-style headquarters — crowned with a temple-like structure and cupola — has stood on Farmington Avenue since 1931. Standing in sharp contrast is the 1972 addition that was built in the Modernist style.
Hartford Mayor Arunan Arulampalam said he is keeping close watch on the Aetna campus, and he has taken note of the decline in personal property taxes.
“Aetna has long been an anchor in Hartford’s business community, and their continued presence is vital to our economic strength,” Arulampalam said. “My office will continue to emphasize the importance of their local investment, and while we cannot influence every corporate decision, I remain confident that Aetna will live up to the commitment they have made to the city of Hartford and to our residents.”
For its part, Woonsocket, RI-based CVS, in a statement, acknowledged its place in the local corporate community.
“Aetna has a long and proud history in Hartford,” the statement said. “We remain committed to maintaining our corporate presence at our Farmington Avenue office and throughout the state of Connecticut. We continuously work to ensure that all our corporate offices are effectively and efficiently utilized in the right way and to their fullest potential.”
“In addition, we currently operate nearly 170 CVS Pharmacy locations in Connecticut, with more than 40 in Hartford County,” the statement said.
Cost-cutting measures
With its acquisition of Aetna in 2018, CVS solidified itself as a health care giant with a massive chain of pharmacies, health insurance, Medicare-focused physician care in neighborhood clinics and a pharmacy benefit manager. PBMs manage drug plans and influence medication prices and distribution.
But late last summer, CVS cut its full-year outlook for profits and launched a new plan to cut $2 billion in cost, partly with 2,900 in layoffs nationwide. CVS cited rising costs in Aetna’s Medicare business a particular concern along with the health care industry faces “disruption, regulatory pressures and evolving consumer needs and expectations.”
Of those layoffs, nearly 100 were in Hartford and came on top of 336 in 2023. In addition, another 350 jobs were cut that weren’t physically in Hartford but directly reported to someone on Farmington Avenue.
An agreement to hold job levels steady in Hartford that was part of the state’s approval of CVS’s acquisition of Aetna expired in 2022.
At the time of the CVS acquisition, Aetna had about 5,300 employees in Connecticut. CVS has not disclosed its current employee headcount in Hartford.
The last year also has been a turbulent period in the company’s leadership. The head of CVS’s Aetna business unit — Brad Kane — was removed in August after less than a year in the job, with CVS chief executive Karen S. Lynch stepping into the role. Lynch, who had strong ties to Aetna and Hartford, was replaced as CEO two months later.
Community leaders in Asylum Hill say they are concerned about Aetna’s presence in their neighborhood. CVS has not disclosed a recent number for employment in Hartford.
“It’s very quiet,” David MacDonald, executive director of the Asylum Hill Neighborhood Association, the area’s neighborhood revitalization zone, said. “I rarely see cars coming in and out of the parking garage there.”
MacDonald said he understands the reality of mergers and acquisitions that come with, what he calls, the inevitable employee downsizings. But more must be done to plan for the future of the Asylum Hill area in and around the Aetna campus, MacDonald said.
He points to the long-vacant, former hotel across Sigourney Street, which runs along the western border of the Aetna campus. The former hotel — later converted to a culinary school that closed down in 2016 — has sat empty since its current owners took over the property in 2021.
“Now it’s in mothballs,” MacDonald said. “Useless.”
Kenneth R. Gosselin can be reached at [email protected].
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