Article 43


Saturday, April 01, 2006

Kiss Bell Labs in Holmdel NJ Goodbye

The long-anticipated hammer may be about to fall on Lucent’s sprawling Bell Laboratories Research and Development facility in Holmdel.

By Tom Caizza
The Independent
March 29, 2006

The 472-acre property and the 2 million-square-foot office and laboratory structure, a staple of Holmdel’s landscape for more than four decades, has gone under contract with a Pennsylvania development firm, initiating a six-week due diligence process, John Skalko, a spokesman for Lucent Technologies, said on Thursday, just hours after employees were notified.

Preferred Real Estate Investments Inc., out of Conshohocken, Pa., will take approximately six weeks to inspect the property and decide whether to purchase the town’s largest ratable, Skalko said.

“The intent is to have the prospective buyer go over the facility,” Skalko said of the due diligence process, “to make sure they’re getting what they’re paying for.”

Under the due diligence portion of the negotiations, the buyer holds the right to kill or modify the deal based on what they find while inspecting the property, according to Skalko. The initial bid, which Skalko declined to quantify, is the starting block for further negotiations.

Preferred Real Estate Investments Inc. is one of the largest privately held real estate companies in the country, with more than a billion square feet of holdings, according to Scott Tattar, a spokesman for the company.

Tattar said that it would be “dangerous to speculate” about plans for the Bell Labs site, but that it will be similar to other developments they have made in the mid-Atlantic region, with a possible mixture of retail, industrial and residential units.

“We will collaborate,” Tattar said. “We will sit down and listen, sit down and talk. We’re not coming in with an iron fist. We’re coming in to talk.”

A letter was distributed to the nearly 1,000 employees at the Bell Labs facility on Thursday afternoon, stating that the company has entered into a purchase and sale agreement and that employees will be moved either to the corporate headquarters in Murray Hill or to the Whippany location by September 2007. Skalko said that there are no plans to downsize any of the workforce from Bell Labs and that they are making space for the displaced employees at those two sites.

The fate of the 44-year-old facility has been no surprise. The company has not kept secret their intent to sell the property, having put it on the market in April 2005. The building is currently only about 25 percent utilized, which Skalko said is indicative of the state of the telecommunications industry.

Skalko said that Lucent itself has downsized in recent years from its peak at well over 100,000 employees worldwide to currently just over 30,000. He said the need for a facility this size is diminishing, and that Lucent is taking advantage of the market to move the property now.

“We are maximizing our real estate holdings,” Skalko said.

Workers disappointed

Bell Labs used to house nearly 6,000 employees. It is currently hovering around 1,000.

Ken Otto, a Holmdel resident who has worked at the Bell Labs facility since 1985, said that the building, while obsolete, has been “an icon of technology” for years.

It is an end of an era,” Otto said. “This has been the center of a lot of people’s work lives for a long time. This is sort of the end now.”

William Riede has been a consultant at Bell Labs for five years and said that it was no surprise that Lucent is closing the enormous facility.

“The building is pretty empty,” Riede said. “I hope somebody buys it who can use some of the special features in it.”

Riede said that he hopes the facility will be in good hands with its new owners, but that living with change will have to be tolerated.

“I don’t have the money to subsidize it personally,” Riede said. “Things change, that is part of life.”

For Steve Conger, who has been at Bell Labs for most of his 23-year career, watching the facility’s demise has brought back unpleasant memories of the steel mills in Pittsburgh that his grandfather worked at while he was growing up.

“Oh my God, I’m reliving that generation,” Conger said of the good steel jobs his grandfather enjoyed before they were sent overseas. “The jobs just went away.”

The bright side is that Lucent will benefit from the sale of the property, Conger said.

“You have to take what you can get,” Conger said. “It is good for Lucent to get out while they can. It’s sad, in general, but that’s not news.”

The move to Murray Hill or Whippany is likely to be an arduous process.

Skalko said that modifications must be made at the two receiving sites to make room for the 1,000 people being relocated, and Riede said moving the lab equipment is a very intensive process.

The biggest inconvenience, Riede said, would be the commute.

“The site is in Northern Jersey and the traffic is horrible,” Riede said.

Conger said he has been spoiled living only one town over and said that he is likely to work from home more often instead of making the hour-plus commute to either of the alternate locations.

An “A+” plan

Rumors of the pending deal to sell the Bell Labs property prompted Holmdel Committeeman Terence Wall to suggest at the March 20 meeting that the township take a proactive approach to the future of the property, which pays Holmdel $3.2 million in taxes each year. It is the township’s largest ratable.

Wall proposed a corporate and community office park that would maintain the property’s ability to generate tax funds while providing amenities to the residents, such as a library, administrative offices for the Board of Education and a senior center.

A resolution was passed that night to instruct the township planner to study any possible uses for the site, including, despite a failed motion by Wall to block it, the possibility of residential units.

Wall’s proposal was met with voracious public approval alongside urgings to not allow new home development.

Linda Madge, the Holmdel historian and a former teacher in the district, praised Wall’s proposal.

“I give you an A-plus for this plan,” Madge said. “What a positive plan.”

Madge said that Bell Labs played a major role in Holmdel’s development, and the new proposal is a way for the town to take part in its future.

“It’s an idea that can bring this town together,” Madge said.

Wall is expected to present his proposal and seek suggestions at the March 30 Holmdel Republican Club meeting at the Caffe Vittoria on Holmdel Road. The meeting starts at 8 p.m. and is open to the public.

Lucent’s days as Holmdel’s largest ratable are numbered. Skalko said the company is committed to the September ‘07 deadline and moving its workforce, whether or not the deal with Preferred Real Estate Investments comes to fruition.

“No matter what happens in regard to due diligence, we still plan on moving people out of there,” Skalko said.



Posted by Elvis on 04/01/06 •
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