In Nutley, Roche exit is a tough pill to swallow

Mayor: Pharma giant was a good corporate tenant

July 02. 2012 3:00AM


If you ask Nutley Chamber of Commerce President Luther Engler about Roche's reputation as a corporate citizen, you'll get a good report.

"A lot of times, there are large businesses that just snub their noses at the chamber and community organizations," he said. "Not so with Roche. Roche was very involved in the community."

Each fall, for the past two years, the company gave each employee 25 "Roche Dollars," redeemable at local businesses in Nutley and neighboring Clifton.

"It was a win-win situation," Engler said. "It was great for the employees, it promoted goodwill and it was great for the community."

Last week, Roche gave its employees — and the community — something very different. The Swiss pharmaceutical giant announced it would close the 80-year-old Nutley operation, consolidating its research at sites in Germany and Switzerland, shedding 1,000 jobs in the process.

When the closure is complete in late 2013, the company will have just 400 New Jersey employees, all located at a diagnostics center in Branchburg.

The notion of a Big Pharma firm slashing jobs is nothing new in the Garden State. Back in 2009, Roche itself announced plans to cut up to 400 Nutley jobs after the company bought California-based Genentech. At the time of that decision, the company had some 3,100 Nutley-based employees.

Still, Nutley Mayor Alphonse Petracco said township leaders had thought Roche would be sticking around longer. The company had recently made facility upgrades and received a five-year tax abatement from the township.
"That's another reason we were so shocked," Petracco said. "Why would you upgrade a property you were leaving?"

Petracco, who was just sworn in as mayor in mid-May, said the company contributed $9 million in taxes to Nutley each year — about 10 percent of the township's tax levy. He said fewer than 100 township residents were employed by the company.

Ernest Landante, a spokesman for Lt. Gov. Kim Guadagno, said there was little the state could do to stop Roche.
"If the company was planning to relocate, we would have certainly been part of that conversation, because we can offer incentives to those companies that plan to relocate," he said. "But in this case, they were simply closing the facility — and there aren't incentives to address that."

Roche was awarded a $3.9 million Business Employment Incentive Program grant back in 2007, in exchange for its plan to hire 160 workers. But according to Landante, the company withdrew from the grant program in 2008, saying it would no longer meet the hiring requirements. It cited the economic downturn and a realignment of business priorities.

It was just two years later when the company announced the decision to cut up to 400 jobs in Nutley.
Roche said it would spend the next 18 months working to help those employees find new jobs. A new Translational Clinical Research Center, to be built on the East Coast, will employ 240, including many workers from the Nutley building; the company has yet to choose a site for the center.

Debbie Hart, president of the trade group BioNJ, said her organization will offer career counseling and placement services to Roche employes, as they've done at times of other downsizings. But she said the loss needs to be placed in the context of other wins for New Jersey, including California-based Allergan's decision to build a new research and development center in Bridgewater (which will bring 400 jobs), and Celsion Corp.'s decision to relocate its corporate headquarters to Lawrenceville, a move that will eventually result in about three dozen new jobs.

"I continue to be optimistic and continue to count the growth of the biotechnology industry in New Jersey," Hart said, "and I hope that that's the message that's getting through."
Hart said she's hopeful the state can find another life sciences tenant to move in to the Nutley site; Petracco, meanwhile, said Roche will need to do significant cleanup before it completely vacates the building.
"That property was heavily contaminated, in our opinion, for years and years when there weren't strict laws" governing pollution, he said.

Petracco said the company has assured the township it will take responsibility for any environmental remediation. He said the township would "take a very hard stance" to ensure Roche follows through on that pledge.
Overall, though, the mayor said he's looking at the closure as an opportunity to bring in a better company, one that will bring new jobs to the township.

Engler said Roche's closure isn't a death blow. "We hate to see them go, but like I said, we're very resilient," he said. "It's not like a General Motors left, or some other big conglomerate left, and it's going to devastate the town."

E-mail to: jaredk@njbiz.com
On Twitter: @JaredKaltwasser


www.NJBIZ.com