[TUHS] Bell Labs Holmdel site coming down

http://app.com/apps/pbcs.dll/article?AID=/20060430/BUSINESS/604300358/1003 Coming down The developer buying Lucent Technologies' 472-acre campus in Holmdel plans to tear down the massive 2-million-square-foot research center that has been home to Bell Labs for the past 44 years. Posted by the Asbury Park Press on 04/30/06 BY DAVID P. WILLIS BUSINESS WRITER As the sale of Lucent Technologies' behemoth Bell Labs research center on Crawfords Corner Road in Holmdel moves forward, one thing seems certain. Preferred Real Estate Investments Inc., a developer that specializes in redeveloping obsolete buildings and properties, will knock down the 2 million-square-foot structure, one of the largest office buildings in New Jersey. "I have walked through that building a dozen times. It is a crime that we can't figure out a way to reuse this building," said Michael G. O'Neill, founder and chief executive officer of Preferred Real Estate Investments. "There is just no way. It is just absolutely and utterly unusable." The way the building was designed, using concrete structural walls and hallways that run along the outside of the building, makes it impossible to redevelop, O'Neill said. "It was built for a single purpose that no longer exists," he said. The company has not yet determined how it will take down the building. The large ponds on the property, as well as its road system, will be used by the developer. Lucent is selling the six-story building to Preferred for an undisclosed price. On Thursday, Lucent spokesman John Skalko said a closing on the deal is "imminent." The original building opened in 1962 and was expanded in 1964 and 1982. It was once home to as many as 5,600 employees. But only 1,054 work there now as Lucent has cut jobs and spun off businesses. The company plans to move the remaining workers to offices in Murray Hill and Whippany by the end of August 2007 as it seeks to make the most use of its real estate holdings. Meanwhile, Preferred Real Estate Investments, a developer based in Conshohocken, Pa., said it will involve township officials and residents to come up with a plan for the 472-acre property. Neighbor Barbara Daly said she would like to see any future development limited to the building's current location on the large property. She also worried about traffic. Even at its height, Lucent's staggered work hours kept traffic down, said Daly, who has lived in Holmdel for 14 years. "Part of the charm of Holmdel is the rural feeling," said Daly. "I don't think we need structures visible from Crawfords Corner Road or Roberts Road." Holmdel resident Teresa M. Graw said the property should continue to be used for office and laboratory space by high-tech companies. "Any new construction should go forward with an understanding and respect for the beautiful open spaces, panoramic views and high environmental quality that the property offers, for these attributes are truly what will continue to bring the most added value to the property in the long run," Graw said in an e-mail. The design of the new buildings could take into account the architectural significance of the original, she said. It was designed by Finnish architect Eero Saarinen, the designer of the Gateway Arch in St. Louis, and is encased in a shell of reflective glass. "It seems to me that they have to somehow capture that, the history, the flavor of the property's past," Graw said. O'Neill said there is no formal plan yet for the property. The company does not contemplate any industrial, retail or high-density residential housing development there. "This property is a magnificent setting for corporate users," O'Neill said. "While the buildings are antiquated, the site should be very, very attractive." Preferred also would keep the property's water tower, designed by Saarinen, which people say looks like a giant transistor. "We think that is really neat," O'Neill said. "The significance of telecommunications shouldn't be forgotten." He believes any design for the property would include several buildings, which would total less than 2 million square feet of office space. He also said they will have to try to explore some other "low density use," such as age-restricted housing, that may be appropriate for the site. The property is currently zoned for office and laboratory use. Any other type of development may require a zoning change, said Christopher Shultz, the township administrator. "We know the sensitivity of the open space along the road and the view," O'Neill said. "The challenge we have on this site is to maintain that bucolic feeling, but create something that is economic." Founded in 1992, Preferred specializes in buying closed properties, such as manufacturing plants and corporate offices or headquarters, which were central locations in a town. The company owns properties from Connecticut to Georgia worth more than $1.5 billion. "We go in and look at these things that have clearly become antiquated from what they were," O'Neill said. "We figure out how to design and envision a new life for those sites." In Hamilton in Mercer County, Preferred is redeveloping an old toilet factory formerly owned by American Standard Cos., converting the World-War-I-era building into 450,000 square feet of office space. Hamilton Mayor Glen Gilmore said Preferred worked with the township, creating a building that is filling with tenants. "They are people who keep their word and are able to take a challenging project and do something unique with it," Gilmore said of the developer. In Holmdel, Preferred executives have already introduced themselves to officials and plan on having a public meeting with residents as well. Mayor Serena DiMaso said the town is looking forward to working with Preferred. The township wants to protect its tax base, DiMaso said. Lucent, the township's largest taxpayer, paid $3.19 million in taxes last year on the property, which is assessed at $98.5 million. "We made them understand that we need the ratable base to remain as constant as it can be," DiMaso said. "They (residents) understand that it cannot be Lucent anymore. They are willing to make the compromise for something else." The mayor said she would like to see it continue to be a development with office or laboratory space. Preferred is aware of the township's commitment to open space, she said. Township Committeeman Terence Wall said he envisions a corporate campus that does not include housing. The property also could include space for a library and offices for the board of education, which are now located in town hall, he said. "They can achieve the return on the investment that they require without a housing component," Wall said. Before the sale was announced last month, Holdmel's elected officials had asked the township's planner to look at the best uses for the property, including those that may require a zoning change, said Schultz. The planner also will look at whether the state's redevelopment law applies to the property.