Aetna’s decision to look beyond Hartford for its headquarters isn’t complicated, experts say: the company wants young, highly educated workers who live in thriving city environments.
At the moment, that isn’t Hartford, which only recently has picked up the pace of adding downtown apartments and other sought-after urban amenities.
“The first thing is that you have to be in a big enough metro area to attract young people,” John Glascock, director of the Center for Real Estate and Urban Economics at the University of Connecticut in Storrs, said. “GE had some problems with top candidates relocating to southern Connecticut.”
Aetna’s relocation of its headquarters would come just a year after General Electric moved to Boston from Fairfield, another blow to a state that had prided itself on its corporate headquarters.
Hartford has struggled with its identity for more than two decades and perhaps longer as its reputation as a center of banking and insurance waned. The city was not in the league of a Boston or a New York, but having the headquarters of a company like Aetna gave Hartford stature.
Aetna’s merger with U.S. Healthcare in 1996 marked the beginning of the company’s transformation into a health service company with a global reach. The merger would take Aetna far beyond its roots in Hartford, which date back more than 150 years.
In the meantime, Hartford, the surrounding region and Connecticut as a whole have struggled to add jobs and stanch the loss of population —key to building the critical mass sought by corporations.
The city of Hartford also faces the possibility of filing for bankruptcy and the state government is caught in a downward budget deficit spiral, unsettling for businesses that look for some degree of certainty, experts said.
An Aetna spokesman said the insurer is in negotiations with several states for a headquarters, “with the goal of broadening our access to innovation and talent that will fill knowledge economy-type positions.”
After GE departed, CEO Jeffrey Immelt framed the dilemma for Connecticut, a suburban state that has long neglected its once-vibrant cities.
Connecticut is “a great place to live. We’ve got a lot of friends there. But I think for all of us, it’s really about the future.”
Beefy metro areas like Manhattan and Boston get the upper hand because they are large enough to have a significant pool of job candidates, especially executives drawing salaries of $120,000 or more, something the smaller Hartford lacks, Glascock said.
“If you are in Boston, L.A. or New York, you probably already have someone in mind for the job without having to bring them in from somewhere else,” Glascock said.
State House Speaker Joe Aresimowicz, D-Berlin, said Connecticut did not have a vision for years on how to revive its cities.
“We were about the suburbs and the cities were forgotten, and we’re paying the price for that now,” Aresimowicz said.
Aresimowicz said progress is being made in cities like Hartford, pointing to the opening of a new minor league baseball stadium. Funding renovations to the city’s XL Center arena, a controversial issue in this session of the state legislature, also is important because it helps shape a city’s identity.
Many young people today are “looking to go to a Celtics game at night, the Bruins game, the Rangers, the restaurants, walking down the street and meeting their friends and doing those sorts of things,” Aresimowicz said.
Hartford has made strides in boosting its vibrancy with the addition of 1,000 new downtown apartments, the near-completion of a downtown UConn campus and the opening of a the minor league ballpark.
Hartford Mayor Luke Bronin said he believes Hartford doesn’t have to be a New York or Boston but can still be competitive.
“Connecticut has the opportunity to be one of those places, but we need to marshal the full strength of our region and our state to invest in a strong, vibrant capital city,” Bronin said, “not at the expense of our suburbs and small towns but for the sake of Connecticut’s future because we are all tied together.”
Suzanne Hopgood, chairman of the Capital Region Development Authority, said the opening of the downtown UConn campus this fall and the start of a Metro North connection from Hartford to New York next year will be “game changers.”
“We’re not at the finish line,” Hopgood said. “Nobody is going to wait for us to get there. They make decisions on what they see now.”
To some extent, however, cities only can have so much influence on where a company decides to locate its headquarters.
A growing number of corporations today also are splitting off headquarters from their central core of employees, a movement that has gathered momentum since Boeing moved its headquarters from Seattle to Chicago in 2001.
The idea is to remove the emotional connection to the community where the company was founded to make strategic decisions that make the most sense for the corporation, experts said.
An Aetna spokesman said the insurer remains committed to its Connecticut employees, and its Hartford campus on Farmington Avenue.
David Cadden, professor emeritus at Quinnipiac University’s department of entrepreneurship and strategy, said the desire to shift corporate headquarters of companies like GE and Aetna are most often for the benefit of CEOs and top executives.
“Thirty years ago, corporations were moving out of New York City to Connecticut,” Cadden said. At that time, big cities were seen as places with too much crime, high taxes and congestion, he said, adding that many of those moves were “because CEOs were sick of commuting into the city from places like Greenwich and Darien.”
And a critical factor in choosing a headquarters rests with where the CEO wants to call home.
“It’s an ego factor,” UConn’s Glascock said. “They feel they want to be where the action is. It’s got to be a visible city.”
