Nutley vs. Prism: Town Ponders Eminent Domain At ON3 Development

NUTLEY, NJ — It’s hard to repair some relationships after they go bad. And if things don’t change soon, there could be a drastically different future for the former home of Hoffmann-La Roche, Nutley officials say.

Recently, Mayor Mauro Tucci and town attorney Alan Genitempo spoke with Patch about a possible legal battle brewing over the development project now known as ON3.

“What we're trying to do is gauge what the impact of that overall development would be on Nutley … on our roads, our water systems, our sewer systems – and on our people,” Tucci said.

The property has gained a new life since the pharmaceutical giant left its former headquarters, which is located on Route 3 at the border of Nutley and Clifton. Over the past several years, its new owner – Prism Capital Partners – has been redeveloping the 116-acre complex, which is now home to tenants that include Ralph Lauren and the Hackensack-Meridian School of Medicine at Seton Hall University.

• See related article: Ralph Lauren Arrives In Nutley, Opens Office At Ex-Roche Site
• See related article: $70M Medical School At Ex-Roche Site Earns 'Good Neighbor' Award

In the past, Nutley officials have had high hopes for Prism's redevelopment plan, approving multiple payment in lieu of tax (PILOT) agreements for ON3. But after years of waiting for the campus to build out, officials said the town has run out of patience with the company’s “piecemeal” progress and failure to address traffic concerns.

Now, Nutley is looking into possibly seizing unused portions of the property through eminent domain, as the project is located in an area in need of redevelopment, officials said. Read More: Nutley, Developer Butt Heads Over Future Of Ex-Roche Property

They may face an uphill battle against Prism, however.

Last week, Eugene Diaz, a principal partner at the firm, fired back at the town's accusations, calling them "lies and falsehoods." Read his full statement here.

Diaz’s rebuttals to a joint news release from Nutley town commissioners included:

WORKING TOGETHER - “The commissioners have not attempted to work with Prism. In fact, the commissioners have refused to meet with Prism for the past two years. Instead, the commissioners have spent more than $1 million of taxpayer money working with consultants that have produced absolutely nothing of value for the future of Nutley.”

NO DEVELOPMENT - “It is clear from their legal strategy and their own inaction in addressing redevelopment of this campus for the past six years, that the commissioner's ideas of redevelopment are 'no development.' They've attempted to illegally close the internal campus roadway system, the result of which would have been to overburden Passaic Avenue and Bloomfield Avenue with even more traffic. The closure of Metro Boulevard was thwarted by the court, who ruled in Prism's and Clifton's favor that Nutley lacks jurisdiction to close intermunicipal roadways.”

TAXES - “Taxpayers need to understand that in order for the township to take this property, they have to float a bond worth tens of millions of dollars and raise taxes to pay for it. Nutley taxes went up 4.5% this past year. That's the 20th highest increase of all 565 municipalities in New Jersey.”

NUTLEY MAYOR: ‘WE HAVE TO DO IT TOGETHER’

Last week, Tucci and Genitempo told Patch there are several things that Nutley residents should know about the standoff with Prism.

One of the most important? Nutley’s mayor and town commissioners have absolutely no desire to be in the real estate business. And the town welcomes “responsible development” with open arms, Tucci and Genitempo said.

“We are still to this day open to discussing and negotiating,” Tucci emphasized. “We understand the role of the developer. We want them to do well, because the better they do, the better the township does.”

“But we have to do it together,” he continued. “And quite frankly, that that just is not happening.”

Tucci and Genitempo said that there are several inaccuracies in Diaz’s statement from last week. Among them:

TAXES – Tucci disputed Diaz’s claims about the town’s property taxes, including the reason why they increased this year. “One was we moved off of transitional aid to permanent aid, which was a major accomplishment with the state of New Jersey,” Tucci said. “We also took over the first aid squad in town, so that was an added expense … And then the last thing was because of the county equalization rate, because of tax appeals in other jurisdictions – we had to pick up a greater share.”

DEVELOPMENT – “The one thing we were against from the beginning was piecemeal redevelopment,” Tucci said. “We said, ‘Look, we need to see an overall plan.’ And the only thing we've seen is that piecemeal development.”

COOPERATION – According to Tucci, town officials helped to expedite financial agreements for the first three buildings at ON3, including the one that is home to one of its flagship tenants, Ralph Lauren. “[Diaz] speaks about trying to meet with us over the past two years and that we wouldn't – outright lie,” the mayor said.

Genitempo wasn’t able to provide Patch with the amount of tax revenue the ON3 campus is currently generating for the township because there are different agreements for different buildings. “The PILOT arrangements, though, are basically for ad valorem tax, except for the county,” he said.

According to the mayor, Nutley’s relationship with Prism first began to sour when officials asked for a traffic study – one of their biggest concerns, as the campus is located near Route 3.

“He denied our request and invited us to do our own traffic study … which we did,” Tucci said.

The results were grim, Genitempo said.

“Our traffic experts that we hired basically said if this property gets built out fully the way they intend on their on their website, then the traffic will be at a standstill in Nutley, all the way from probably Passaic Avenue and Kingsland, all the way up through four corners and into Clifton,” he said.

“We asked our traffic experts to really look at it,” Genitempo continued. “And they came up with a plan called ‘The Flyover,’ which would provide a ramp to allow cars to go westbound on Route 3, and again, gain access to the site when they're heading westbound on Route 3.”

Prism dismissed it outright, he said.

Other responses to the town’s traffic requests also got a unilateral reply from the firm, officials alleged. For example, Tucci pointed to Prism’s plan to put a truck terminal south of Kingsland.

“A truck terminal does not work in that neighborhood,” Tucci said. “It'll destroy that neighborhood. There'll be trucks going in and out, 24/7.”

After hitting a wall with the company, town officials are pondering whether to seize some undeveloped parts of the campus through eminent domain and the condemnation process. But Tucci and Genitempo added that there is still a chance to get things back on track.

“Let's try and move forward,” Tucci said. “Let's do what's best for both the developers so they can maximize their return on investment, and what's best for the town, so we can peacefully coexist. That's been our position, right from the beginning. And that has not changed, not through [the mayoral terms of] Alphonse Petracco, not through Joseph Scarpelli, and absolutely not through me.”

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