Nutley, Developer Continue Shoving Match Over 'ON3' Complex

NUTLEY, NJ — A long-running tug-of-war continues between the town of Nutley and the developer of one of its most prominent pieces of real estate. The latest flashpoint? A proposed warehouse project that officials say hasn’t gotten a green light – despite what residents may have heard.

Mayor John Kelly III and the Nutley Board of Commissioners issued a joint statement on Friday that accuses Eugene Diaz of Prism Capital Partners – the developer of ON3 – of making “misleading and disingenuous comments” about the potential development of property across from its main campus near Cathedral Avenue.

The former home of Hoffmann-La Roche on Route 3, the complex now known as ON3 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

Here’s the latest problem that has popped up, according to Mayor Kelly and the commissioner board:

“For the past few years, ON3 developers have sought to establish a truck depot on the property. After the township rejected that plan, they have shifted their focus to openly promoting a warehouse project through signage at the property’s entrance, which has not been approved by the township or permitted by any court.”

“It’s been claimed that we turned down a data center or assisted living facility for that site, but that is simply untrue,” Kelly said. “In fact, once those proposals were presented, the developer unilaterally withdrew them while we were conducting our due diligence.”

The firm is now incorrectly asserting that the court ruled in favor of a warehouse plan because it was allegedly wrongfully denied by the township, insisting that it must be regarded by [the Nutley] Zoning Board of Adjustment as ‘conforming as right use,’ Kelly said.

“The reality is that the court merely sent it back to the zoning board for reconsideration with its guidance,” the mayor said.

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."

Here's how some local residents and internet pundits reacted to the board’s statement:

• “One big chess game or is it poker? Anybody with any development experience can clearly see that site has very limited road access and no real way to correct it. Truck depot would overwhelm that area with traffic, pollution, and 24-hour noise and struggle to be successful. Stay the course commissioners (all five), along with review boards and keep communications open and transparent.”
• “If everyone is going to be so critical of the negative things, it’s only fair to give credit where they are doing good things – this is a perfect example. Don’t let yet another corporate entity ruin that lot for the second time. A warehouse would be a disaster for the neighborhood and provides zero utility for citizens.”
• “No truck depot. Whatever the cost. Period.”

NUTLEY AND ON3: A BRIEF BACKGROUND

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 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 say 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 Friday.

“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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