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It's all about making a match State trying to take lead on white elephant issue

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The Former Alcatel-Lucent campus, 100 Bayer Blvd., Hanover Township (Whippany section) was purchased by Bayer HealthCare in 2011.
The Former Alcatel-Lucent campus, 100 Bayer Blvd., Hanover Township (Whippany section) was purchased by Bayer HealthCare in 2011.

In South Plainfield, municipal leaders have adopted the old adage about throwing everything against the wall and seeing what sticks.

At least when it comes to their attempts to find a user for the former Motorola corporate campus that now sits vacant along Durham Avenue.

The 237,000-square-foot building was sold to a developer years ago that has actively marketed the site. Mayor Matthew Anesh said the borough has offered its own economic development assistance to help with the process, and while there's been some interest over the years, it doesn't change the fact that the property is still without an anchor tenant.

That's why when the state Business Action Center expressed interest in working with South Plainfield — as part of a new statewide initiative geared at helping municipalities market and ultimately repurpose vacant or underutilized corporate campuses — Anesh didn't hesitate to accept a helping hand.

“It's always beneficial that you have the state and especially the Business Action (Center) looking to help you and market key sites that you've identified through your municipality,” he said. “I think it only raises that luster a little bit more and I think that's exactly what it has done for us so far. So, we're hoping that it's going to be successful.”

No one is rooting harder for South Plainfield than the BAC, which has made solving the state's so-called white elephant problem of vacated suburban office parks a top priority.

The agency has targeted roughly 60 sites across New Jersey, with the criteria being that it boast at least 250,000 square feet of built area on 10 or more acres. Nearly all are located within the northern and central parts of the state, with only about four to six sites currently noted in South Jersey.

Since they differ in size of the property, square feet of developable space and, most important of all, location, it's easy to come to the conclusion that each of the state's white elephant campuses is different.

But Gerry Scharfenberger, the director of planning advocacy at the BAC, sees it differently.

At least he does when he and Lauren Moore, executive director of the state agency, meet with the leaders of municipalities that are trying to find new tenants — and new ratables — for their empty office parks.

“You have to get their mindset out of waiting for the next big company to come in,” Scharfenberger said. “It's possible, but it's not all that likely.”

That realism is the impetus behind the BAC's initiative and one that Anesh said he has come to understand.

“We're open to whatever the best thoughts and ideas out there are,” Anesh said. “A lot of times, you've got to face reality. If a property has been vacant for a number of years, depending on the specifics regarding it, things may change. You can't always hold on to the fact that you're going to get a large corporation to move into that site. So I think you have to be open to other things.”

For Moore, the motivation for the initiative came from working on deals such as Bayer HealthCare's 2011 purchase of the former Alcatel-Lucent campus in Hanover Township.

“(Bayer was one of the) eye-opening successes that kind of set us on this path and created a template for us,” he said.

During the process, the state was involved in getting Bayer, Alcatel-Lucent and the township to all work together and hammer out an agreement that benefitted all parties.

“That's what kind of opened our eyes as, 'Wait a minute, that's a nice success. This is a success that we really want to share with other municipalities,' ” he said.

With the inventory the agency has identified, Scharfenberger and his team have conducted meetings with several municipalities about their corporate campuses.

In addition to South Plainfield, the state has thus far met with Readington Township to discuss the 1 million-square-foot mega campus left behind by pharmaceutical giant Merck, Mount Olive about the former BASF campus and Galloway Township about several sites located there.

And a meeting with Hamilton Township in Atlantic County, where multiple locations have also been identified, is on the books for the near future.

Moore and Scharfenberger said that, perhaps unsurprisingly, each site in each municipality is handled uniquely. It is still ultimately up to the municipalities to decide the best course of action for the redevelopment or repurposing of a campus.

“We're here to share in these experiences with them to help them see what other municipalities have done and what they can do and provide them with the tools to help them redevelop these sites,” Moore said.

Tools that include incentives.

Citing examples such as the Bayer deal and Memorial Sloan-Kettering Cancer Center's 2013 purchase and repurposing of a former Lucent Technologies site in Middletown, Moore said that incentives “absolutely are available” for corporate campus projects.

In 2011, Bayer was approved by the state for a $14 million Business Retention Relocation Assistance Grant and a $22.2 million Business Employment Incentive Program grant for the retention and creation of jobs. The following year, Memorial Sloan-Kettering was approved for a $7.9 million Grow New Jersey award, which encouraged the organization to purchase the site.

But for the majority of the targeted sites, their suburban locations do not lend themselves to some of the more impressive incentive packages recently seen for projects in urban areas under the revised Economic Opportunity Act.

Moore said that doesn't hinder the state from being able to “still put a very handsome package on the table for the suburban locations.”

“Are they Camden-like incentives? No,” Moore said. “Are they healthy, attractive incentives? Absolutely, they are.”

It's all about keeping things in perspective.

Marc Policarpo, a senior vice president with Philadelphia-based Binswanger, said that among other reasons, suburban campuses have suffered from a desire by millennials to work, live and play in urban spaces.

When putting these campuses on the market, Policarpo said it really is dependent on a site's location and upkeep in terms of how easy it will be to find a new tenant.

Municipalities must also be flexible in what they will consider for a space, Policarpo said.

“The people that are going to win in this thing are the people that are agile,” Policarpo said.

The ones, like Anesh, who are willing to accept anything that sticks.

Don't laugh — Anesh said the BAC's help already has generated some cause for optimism.

“It's already bringing in some leads that I'm sure that we would have not (received) from other avenues,” he said.

E-mail to: andrewg@njbiz.com
On Twitter: @andrgeorge

The transformative property

Locations the state has been successful in helping to transform:

  • Former Lucent Technologies site, 480 Red Hill Road, Middletown
    Worth noting: Purchased by Memorial Sloan-Kettering Cancer Center in 2013. Will reopen in 2016.
  • Former Alcatel-Lucent campus, 100 Bayer Blvd., Hanover Township (Whippany section)
    Worth noting: Purchased by Bayer HealthCare in 2011

Existing white elephants the state currently has identified that are priorities:

  • Former Motorola site, 1111 Durham Ave., South Plainfield
  • Former BASF site, 450 Clark Drive, Mount Olive
  • Former Merck headquarters, 1 Merck Access Road, Readington (Whitehouse Station section)

Empty corporate campuses are a concern of many around the state

The state isn’t the only entity that’s beginning to seriously look at aging corporate campuses.

The topic has long been a discussion point for James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. And now PlanSmart NJ, a nonprofit planning and research organization based in Trenton, has recently undertaken a two-year research project to gain new insights on vacant corporate spaces and offer them to host communities.

PlanSmart Executive Director Ann Brady said there are similarities to the work the BAC is undertaking. But while the state will look to facilitate discussions, PlanSmart will look to gather the necessary background information and analysis.

“Our project is focused more on comprehensive data collection so that we can really quantify the magnitude of the problem of these stranded, underutilized and abandoned suburban office campuses and retail centers,” Brady said.

Ultimately, PlanSmart will look to put together a user-friendly guide. Brady said that PlanSmart has long been focused on land use issues in New Jersey and the issue of repurposing of corporate campuses has not been exclusive to that.

“This is really an extension of work that we’ve been doing,” he said. “This has been on our radar for many, many years.”

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