Nutley Loses Court Battle Over Warehouse At ON3, Files Appeal (UPDATE)

This article was updated on March 6

NUTLEY, NJ — Nutley has lost another court battle involving the ON3 complex on Route 3, but town officials have appealed the decision.

For nearly four 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 on Feb. 4. The firm is working towards getting on the Nutley Planning Board’s calendar for March, NorthJersey.com reported.

Nutley officials filed an appeal against the trial court’s order on Feb. 19.

According to a statement from the township, the appeal addresses all of the concerns that Nutley had previously raised – including the township’s position that the trial court “wrongly classified” the developer’s application as a permitted warehouse use, rather than a non-permitted truck terminal.

The 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 John Kelly III and the Nutley Board of Commissioners issued a joint statement that accuses Prism of making “misleading and disingenuous comments” about the warehouse plan.

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.

• See Related: Nutley, Developer Continue Shoving Match Over 'ON3' Complex

Send local news tips and correction requests to eric.kiefer@patch.com. Learn more about advertising on Patch here. Find out how to post announcements or events to your local Patch site. Don’t forget to visit the Patch Belleville-Nutley Facebook page.