This VS 2012 extension is meant to allow me to add a local Development STS to my MVC application http://visualstudiogallery.msdn.microsoft.com/e21bf653-dfe1-4d81-b3d3-795cb1
Removing FormsAuthentication module worked for me.
<httpModules>
...
<remove name="FormsAuthentication" />
</httpModules>
In my case I added this
<system.web>
...
<httpModules>
...
<remove name="FormsAuthentication" />
</httpModules>
</system.web>
and this
<system.webServer>
...
<modules>
...
<remove name="FormsAuthentication" />
</modules>
</system.webServer>
EDIT
The next problem you might get is this
A claim of type 'http://schemas.xmlsoap.org/ws/2005/05/identity/claims/nameidentifier' or 'http://schemas.microsoft.com/accesscontrolservice/2010/07/claims/identityprovider' was not present on the provided ClaimsIdentity. To enable anti-forgery token support with claims-based authentication, please verify that the configured claims provider is providing both of these claims on the ClaimsIdentity instances it generates. If the configured claims provider instead uses a different claim type as a unique identifier, it can be configured by setting the static property AntiForgeryConfig.UniqueClaimTypeIdentifier.
add these 2 claims to the Development STS in the Identity and Access Tool
http://schemas.xmlsoap.org/ws/2005/05/identity/claims/nameidentifier
http://schemas.microsoft.com/accesscontrolservice/2010/07/claims/identityprovider
and add this line to your Global.asax
AntiForgeryConfig.UniqueClaimTypeIdentifier = ClaimTypes.NameIdentifier;
This article helped me
I had a similar problem with my MVC4 application on local IIS Express.
It turned out that Windows Authentication was enabled for the project. Disabling Windows Authentication (in project properties pane -- press F4) fixed the problem.