By Ron Leir
The township’s biggest taxpayer is trying to make nice before it packs up and bids farewell to an 83-year legacy.
To that end, Hoffman- La Roche Inc. (Roche) has pledged certain financial concessions to the township – similar to those made to its partner community, Clifton – to prevent Nutley from capsizing.
In June Roche announced plans to phase out its Nutley/ Clifton base of operations by the end of 2013 and transfer its New Jersey pharmaceutical research facilities to locations in Europe.
To ease the pain of its pending departure, according to company spokeswoman Darien Wilson, Roche has agreed to:
• defer demolition of one eight-story office building on its Nutley campus that was scheduled to be torn down this year. Wilson said that this building has been “out of use since earlier this year” and that employees who worked there have been absorbed elsewhere.
• hold off, for now, taking down additional buildings on the Nutley campus. Wilson said there are 40 buildings, “mostly on the Nutley side,” spread among the company’s 119-acre campus. Clifton’s portion of land is slightly more than half of that acreage, she said. Because the county line runs through the middle of the property, some buildings straddling that boundary line are situated in both Nutley and Clifton.
• waive a sewer credit it is owed. Wilson said that in December 2009, Roche determined that it had been “overcharged” on its sewer bills from the township for a fouryear period. The company “came to an agreement with Nutley that they’d reimburse us $750,000. We agreed to a tiered repayment where they’d initially pay us $250,000, with the rest to be paid at $50,000 a year over 10 years. To date, we’ve received $350,000.” Under the new agreement, Nutley is off the hook for the balance, she said.
• give up tax abatements previously granted by the township. Wilson said Roche had been extended an abatement on taxes paid to Nutley for several buildings “redeveloped or re-designed” since 2009. The five-year abatement, calculated annually at increasing percentages of the property’s true value, ratcheted up 20% each year, was to begin year 4 on Oct. 1. The overall value of the abatement is $5 million, Wilson said.
According to Nutley Finance Commissioner Tom Evans, Roche’s concessions mean that for 2012 Nutley can expect to collect $9.4 million in taxes from Roche for this year and an estimated $10 million for 2013.
Roche has also agreed to “maintain its tax base for Clifton at $4.5 million a year for the next two years as well,” Wilson said.
The Nutley concessions were hammered out during “ongoing dialogues” involving Roche Vice President Tom Lyon, who oversees the Nutley site, and township representatives, Mayor Alphonse Petracco, Township Attorney Kevin Harkins and Evans, according to Wilson.
“The next step (for Nutley),” Harkins said, “is to sit down with (Roche) to formalize the agreement, for approval by the township governing body.”
Harkins said the concessions are “meaningful in terms of providing tax stability for 2012 and 2013 and it gives us time to repurpose the site.”
Roche, headquartered in Basel, Switzerland, will be phasing out its New Jersey operations over the next 15 months, Wilson said.
Currently, there are about 1,000 full-time employees – scientists, clinicians, engineers, attorneys, human resource and communications personnel – plus an additional 1,000 “part-time or contingency workers” remaining on site, including about 80 from the Nutley community, according to Wilson.
“Many commute from Pennsylvania, New York, from all over the New Jersey area, and even some from Connecticut,” she said.
“We anticipate having a small crew of employees doing maintenance and remediation of soil and groundwater,” she said, to deal with “pockets of contamination” resulting from more than eight decades of pharmaceutical manufacturing and research on site.
Over time, Wilson said, environmental regulations have changed and Roche wants to leave a clean site when it departs. She said the company has engaged TRC, a New Jersey-licensed site remediation professional engineering services firm headquartered in London, to direct cleanup efforts.
“We’d like to be complete (with remediation) by 2015 so we can sell the site,” Wilson said. “We have gotten quite a lot of interest (from prospective purchasers).”
To that end, Nutley officials have “discussed with Roche and Clifton formation of a joint commission to look to strategically develop the property in the best interests of both communities,” Harkins said.
“We’re going to work in collaboration with Roche and Clifton to market the property to attract new owners.” “We’re looking at the posssibility of funding that joint commission,” Wilson added.