It lacked the intrigue and the state-on-state warfare that's become common in corporate relocations, but the sudden news that Bausch & Lomb's headquarters will be moved to New Jersey has raised eyebrows and questions in the real estate community.
The eye care giant occupies space in Madison's Giralda Farms, but has been based in Rochester, N.Y., for more than a century. That's set to change following last week's announcement that Valeant Pharmaceuticals International — which is taking over B&L — wants its new acquisition to call the Garden State home.
Valeant, in Canada, also has a New Jersey address — its American headquarters are in Bridgewater — and has said it's looking between there and Madison for B&L's new headquarters.
And while neither town has an insight on Valeant's next move, both are getting ready to flash their corporate credentials as the drugmaker weighs its real estate needs.
"They're already aware of what it is to be in our township," Bridgewater Mayor Dan Hayes said. "Now, we're reaching out to make sure that they know we're continually interested in having them stay in our township."
Wherever the company winds up, it's unclear if New Jersey's corporate incentives will get it there — the Economic Development Authority that awards grants and tax credits said it hasn't heard from Valeant — and it'll do so without inciting a border battle between states.
It's unusual to not publicly consider multiple locations, said Jay Biggins, a Princeton-based site selection consultant. But coming job cuts may have spurred the company to act quickly — and made incentives less important.
"In M&A situations, there are typically a set of overriding variables that rise to the top and tend to crowd out others. Because they have to get it done, they have to be settled quickly," said Biggins, executive managing director of Biggins, Lacy, Shapiro & Co. The move has implications for employee morale and retaining key executives, "so they had to jump out in front with a clear message as to their plans."
Choosing New Jersey also gives Valeant a common denominator: It has about 200 employees at its Bridgewater offices, spokeswoman Laurie Little said, while Bausch & Lomb has another 200 at its pharmaceutical division in Madison. But the eye health company's lease in the borough is up in December, while Valeant's expires next year.
"We will consolidate in one location at some point, once we determine exactly where that is," Little said in an e-mail. She added that the new site will be "somewhere close to our employee population" to avoid displacing New Jersey workers.
But Valeant is not considering new construction for the new headquarters, Little said. That will leave the company searching for offices in several suburban submarkets that are considered prominent, but still struggle with high vacancy. In the lower 287 and Route 24 submarkets, which include the Bridgewater and Madison offices, vacancy is 34.3 percent and 27.3 percent, respectively, according to data from Jones Lang LaSalle.
Madison Mayor Robert Conley said he hasn't directly spoken with Bausch & Lomb executives since Valeant's announcement, but the next step is "reviewing the options and reminding them of why they chose Madison in 2009. … And hopefully, they'll pass that message on."
A key part of Conley's pitch: Madison is one of just seven New Jersey towns to operate its own electric utility, so "the ability to restore power to corporate centers after a weather disaster is far different in Madison than in other locations."
So when Hurricane Sandy knocked out power to much of Morris County last fall, Madison got the lights on within 48 hours for residents and other corporate tenants, like Pfizer Consumer Health.
"On the positive side, when a corporation is in town, they have that communication line and know they're considered a priority," Conley said.
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