[TUHS] Bell Labs Holmdel site coming down

[tuhs at entropy.homeip.net]

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.