Developer Abandons ‘Truck Depot’ Proposal In Nutley After Pushback From Town, Residents

NUTLEY, NJ — Some call it a “truck depot.” Others say it's a “warehouse.” But whatever the nomenclature, a legal shoving match over a proposed project near the ON3 development site on Route 3 has apparently come to an end with a pledge from the developer – it will be withdrawn.

Last week, the Nutley Board of Commissioners introduced an ordinance involving 275 Kingsland Street. Located across from the ON3 main campus near Cathedral Avenue, the site has become embroiled in a controversial land use dispute.

For years, the town has been embroiled in a legal standoff with Prism Capital Partners – the owner of ON3 – which filed an application to build a warehouse along Kingsland Street in 2020. The town determined that the proposal violated a local zoning ordinance that prohibits the construction of truck terminals. Prism filed a lawsuit against Nutley in 2021, and finally saw a ruling in its favor earlier this year.

Nutley officials filed an appeal against the trial court’s order in February, arguing that the court “wrongly classified” the developer’s application as a permitted warehouse use. See Related: Nutley Loses Court Battle Over Warehouse At ON3, Files Appeal

The proposal has also seen pushback from local residents, who launched an online petition titled “Stop Warehouse Construction from Destroying Nutley.”

According to the petition, which has garnered more than 2,500 signatures:

“A mega-warehouse is being proposed on Kingsland Street, in the heart of a residential neighborhood surrounded by family homes. This very land was the subject of a class-action lawsuit involving over 400 homeowners, after toxic chemicals from the former Hoffmann-La Roche site were found to have contaminated local soil and groundwater. A $17.5 million settlement was awarded for the damage done — and yet now, development continues … Kingsland Street is already a high-traffic, accident-prone road, located just off a jughandle — a known congestion point. Adding industrial truck traffic will only worsen it, putting families, children, and school commuters at risk.”

‘WE LOOK FORWARD TO WITHDRAWING THAT APPLICATION’

Eugene Diaz, the founder of Prism Capital, addressed the attendees at last week’s meeting, telling them that the application will be dismissed and withdrawn.

“There's been an awful lot out there recently regarding a warehouse application for 275 Kingsland Street, which was adjourned several weeks ago at the Planning Board meeting,” Diaz said.

According to Diaz, the involved parties are trying to make sure that future projects at ON3 are done with a “more amicable and mutually agreeable use.”

“My thanks and gratitude are to your commissioners, who over the last two weeks, worked way past midnight on many, many nights to resolve an awful lot of major issues, questions and concerns,” Diaz said.

“We look forward to withdrawing that application ultimately and proceeding with development of new uses for these sites,” Diaz added. “I'll leave it up to the commissioners to tell you what some of those uses will be, but suffice it to say, they won't have that kind of truck and traffic impact that so frightened everybody.”

Watch Diaz speak about the application at the June 17 meeting below (video is cued to Diaz's comments, article continues underneath).

Nutley Mayor John Kelly III said the withdrawal of the proposal represents a team effort from everyone involved.

“I want to congratulate the [board of commissioners] and Prism Capital on this all-hands-on-deck effort that has lasted nearly a decade,” Kelly said.

So what might be in store for 275 Kingsland Street instead?

If it passes a final vote, the ordinance would create an overlay zone for redevelopment, enabling the property to be transformed into a data center or another use as specified in the town’s redevelopment plan.

“With respect to the Kingsland site, the redevelopment plan contemplates a data center being placed there,” township redevelopment counsel Josh Zielinski said.

• See Related: Electric Bills Being Driven Up By AI Data Centers In NJ, New Report Says

DEVELOPMENT AT ON3

A second ordinance introduced at last week’s meeting creates an overlay zone for the redevelopment of properties which were part of the former Hoffmann-La Roche campus, allowing for their conversion into medical offices and practices (as outlined in the town’s redevelopment plan).

The public will have the chance to voice their opinion about the two pending ordinances at the commissioner board meeting on July 1, and also had a chance to offer input at a planning board meeting on June 18.

“These are your opportunities to express your concerns, praise or indifference toward the plan,” Kelly said. “We are moving quickly over the next two to three weeks, so mark your calendars.”

Hopefully, the future of ON3 will be smooth sailing from here on out, several Nutley commissioners said:

Thomas Evans – “Reaching this point hasn’t been easy, but it has been necessary to achieve our goals. Since we began this process, our aim has been to create a future-oriented, technology-focused, science-based campus that promotes economic growth, restores lost ratables from the divestiture of Hoffmann-La Roche, and aligns with community needs. I am very pleased with our progress.”

Mauro Tucci – “This day has been a long time coming. It’s been a challenging journey, but I believe that the ongoing redevelopment will be remarkable.”

Joseph Scarpelli – “First, I want to thank Prism Capital for their work on the campus so far. It has truly become a premier innovation hub in New Jersey and the metropolitan area. With our actions over the next two weeks, we will further enhance this life sciences campus. Congratulations to our team and Mr. Diaz’s team for moving this forward. Sometimes obstacles arise, but when everyone comes together for the common good, that’s what matters. We are in a great place right now, so let’s move forward. Good times are ahead.”

Alphonse Petracco – “I am pleased to witness progress at the site. During my tenure as mayor from 2012 to 2016, it seemed bleak after Roche's departure. It is encouraging to see, through the hard work of everyone involved, that a truck terminal will not be established there. I am also excited about the global settlement and the prospect of regaining taxable properties without any impact on the school system.”

LIFE AFTER HOFFMANN- LA ROCHE

The ON3 complex – which was once former home of Hoffmann-La Roche – has gained a new life since the pharmaceutical company left its former headquarters, which is located on the border of Nutley and Clifton.

Over the past several years, Prism Capital Partners has been redeveloping the sprawling complex, which now hosts tenants that include Ralph Lauren and the Hackensack Meridian School of Medicine. It also recently became home to a new Starbucks location.

Prism released an update about its Phase IV plans for the campus last summer, which can be seen here.

The site has seen accolades; it was named as 2023 “Redevelopment of the Year” for northern New Jersey by CoStar as part of its Impact Awards, and earned a Silver Award for “Best Development: Mixed-Use” in Commercial Property Executive’s annual Influence Awards. Read More: Life After Hoffmann-La Roche: ON3 Gets More Awards

The development hasn’t been without its critics, however, including officials in the town of Nutley. Read More: Nutley, Developer Butt Heads Over Future Of Ex-Roche Property

Earlier this year, Mayor Kelly and the Nutley Board of Commissioners issued a joint statement that accused Prism of making “misleading and disingenuous comments” about the warehouse plan. Read More: Nutley, Developer Continue Shoving Match Over 'ON3' Complex

Kelly said the board will not “bow to corporate greed,” adding that he hasn’t gotten a meeting with Diaz since first joining the commissioners in 2020.

“I am always willing to work with him, but Mr. Diaz and his team have made it clear that they have no interest in a dialogue and would rather unilaterally attempt to assert their plans and attempt to sow discord in the community,” Kelly said. “It would be in his best interest to come back to the negotiating table because the board of commissioners and the township remain united despite his misguided delusions.”

Diaz pushed back, giving Patch the following reply to last week's message from Kelly and the board:

"The township’s statement is so fraught with falsehoods it would take an entire article to address them. Further, in every instance – on five separate occasions – the courts have found in Prism’s favor for cases related to ON3 and Nutley Township, confirming that our company tells the truth. The fact remains that in the last nine years, the commissioners have not approved a single new project for development at ON3. Not only have they wasted, and continue to waste, taxpayer money fighting individual development proposals rather than negotiating a comprehensive redevelopment plan as Clifton has done, they have also lost out on revenue for Nutley that could be easing the tax burden of its citizens this very day."

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 began to run out of patience, accusing the company of making "piecemeal" progress and failing to address traffic and infrastructure concerns.

In 2021, Nutley officials announced that they were looking into seizing unused portions of the property through eminent domain, as the project is located in an area in need of redevelopment.

They have faced an uphill battle against Prism, however. Later that year, Diaz, a principal partner at the firm, fired back at the town's accusations, calling them "lies and falsehoods." Read his full statement here.

The face-off continued through the year, with both sides claiming the other was coming to the table in bad faith. Read More: Nutley, Prism Trade 'Facts And Fictions' As ON3 Battle Heats Up

Other recent development news involving the site has included Hackensack Meridian Health's new ambulatory care center, a proposal for mixed-use housing and a seven-story Marriott AC/Element Hotel on the Clifton portion of the campus – which also saw a legal challenge from Nutley Township.

• See Related: Nutley Loses Lawsuit To Stop Hotel Project
• See Related: New Health Care Center Is On Schedule At ON3
• See Related: Developers Propose Housing For Ex-Roche Complex On Rt. 3

The developers of the ON3 complex have continued to advocate for a “vibrant, mixed-use community” at the site, claiming that the campus is creating jobs and stabilizing the tax ratable base in Nutley and Clifton.

However, Nutley officials are making things difficult, developers wrote in a recent online petition:

“Prism has made outstanding progress bringing back jobs and filling empty buildings at the ON3 campus, but Nutley municipal leaders are taking an anti-progress stance by objecting to and interfering with future economic development at ON3. These delays affect plans for growth of a unified ON3 campus with a Marriott hotel, assisted living, medical office building and more.”

Meanwhile, Nutley officials have said they’ll try to keep bargaining in good faith with Diaz and Prism.

“Over the last decade, our board of commissioners has turned what could have been a devastating loss into a significant victory with the ON3 property,” Kelly asserted in January.

“We’ve negotiated in good faith and, at times, had to advocate strongly for what we believe is best for Nutley—and we will continue to do so,” the mayor added.

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