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Nutley hoping for state bailout on Roche

Photo by Karen ZautykThe Roche Co. on Kingsland St. in Nutley.

Photo by Karen Zautyk
The Roche Co. on Kingsland St. in Nutley.

 

By Ron Leir

Observer Correspondent

NUTLEY –

As municipal officials from Nutley and Clifton ponder strategies for replacing the Roche pharmaceutical company as their largest taxpayer, a legislative effort is afoot to ensure at least partial financial recovery.

The first public inkling of that effort came to light at the Jan. 15 meeting of the Nutley Township Council when Finance Commissioner Thomas Evans had prepared to offer a resolution endorsing “new [state] legislation entitled, “Corporate Disinvestment Property Tax Relief Act ….”

But Evans ended up withdrawing the resolution, saying only that the commission needed to first get Roche’s answer to an undefined “technical question” before proceeding. He declined to further elaborate.

The aborted resolution – a copy of which had been provided to the press prior to the meeting – referenced Assemblyman Ralph Caputo (D-Belleville), along with State Sen. Ronald Rice (D-Newark), both of the 28th legislative district, as the prime movers.

The Observer contacted Caputo to try and unearth the mystery and Caputo obligingly explained that Nutley was doing the right thing by delaying its formal support until a joint committee of Nutley and Clifton representatives had concluded negotiations with Roche on the terms of the Switzerland-based company’s departure, including cooperative efforts on finding a suitable occupant for its properties.

The bill, Caputo said, “has been worked on for months” since Roche announced its intention to leave by 2015 but exists at this point only in draft form and has yet to be introduced so it hasn’t been assigned a bill number.

An explanatory statement attached to the draft says that it’s designed as a special municipal aid program “to alleviate the property tax impact of the departure of a major business from the municipality.”

“This bill would help alleviate the sudden shock to the property tax base caused by a decrease in the assessed valuation of the former property of the departing major business by providing aid to compensate for the lost property tax revenues until the overall tax base has sufficiently recovered. This aid would help the municipality meet its budgetary needs while also helping to maintain property tax levels,” the statement says.

A municipality would qualify for this aid if the departing business has the biggest tax assessment in the municipality, equals or exceeds 10% of the municipality’s tax base, equals or exceeds $300 million in assessed valuation and employs not less than 1,000 employees.

The municipality would need approval from the director of the state Division of Local Government Services to receive the aid.

The formula tentatively established for computing the amount of aid calls for “… an amount equal to the current equalized tax rate for school and municipal purposes … multiplied by the difference between the equalized assessed valuation of the [departing business] in the current tax year and [that business’s] equalized assessed valuation in the tax year prior to the decrease in [its] valuation … resulting from the departure of the business ….”

In Nutley’s case, Roche could qualify for $5 million a year in special state aid, according to Caputo, to help make up the difference in lost real estate taxes.

Without that aid, Caputo said it could mean a 10% hike in taxes for Nutley property owners. Evans couldn’t be reached for further clarification on that point.

But after last Tuesday’s commission meeting, Evans did say that the proposed legislation “isn’t being crafted just for Nutley.” It’s aimed at helping bail out those communities experiencing the “catastrophic event due to the closure of a large corporate taxpayer,” he said. Nutley’s misfortune, Evans added, “is just part of a continuation of an exodus from New Jersey by other companies, as well as Roche.”

Under the proposed bill, the amount of special aid received by a municipality would be reduced “in proportion to any subsequent increase in the value of the overall equalized property tax base” and the aid would cease “when the value of the overall equalized property tax base returns to an amount that equals or exceeds 95% of the value of the overall equalized property tax base ….”

As the bill is now drafted, it calls for an appropriation of $5 million to fund state-wide distributions of the special aid, as needed. “The state would have to put it in the budget,” Caputo said. “That’s not an easy lift,” he conceded, given that projected state revenues are down this year.

“I’m not saying this bill is the complete answer,” Caputo said. “But it’s a beginning.”

Meanwhile, Evans said that members of the joint committee are “identifying professionals to help the municipalities make good decisions on identifying the highest and best use for the property that Roche is vacating.”

So far, four professional firms have been tentatively targeted to provide that help, said Roche spokeswoman Darien Wilson. She declined to name them.

But Evans said he’d “welcome the expertise of an economic development expert, an LSRP (Licensed Site Remediation Professional) and a planner” to help advise Nutley on how its Roche parcel could be marketed for future use.

“We have 120 acres of prime real estate,” Evans said.

In neighboring Belleville, that township is finalizing a redevelopment plan for the re-use of nearly 19 acres of property owned but no longer used by Roche. Township planning consultant John Madden figures that plan should be before the Planning Board “by February or March.”

A draft of that plan prepared last week proposes “22 different uses” for the site, excluding residential and/ or assisted living facilities, Madden said. “The emphasis would be on medical services,” he said, “because you have the hospital [Clara Maass Medical Center] next to it. So it makes eminently good sense to feed off of that. We wouldn’t have any residential in this zone,” Madden said. “It just complicates things.”

“We do hope to preserve many of the tall trees on the site, many of which happen to be on the perimeter of the property,” Madden noted.

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