New Jersey’s suburban communities are facing a new challenge. With increasing frequency, the evacuation of the classic suburban office park is being reported. The examples are more and more plentiful: Pearsons Education is moving from Upper Saddle River to a Hudson River site in Hoboken; Panasonic is leaving its Secacus location for an office tower under construction in Newark; Merk is moving many of its workers from it palatial Whitehouse Station campus to Kenilworth; Honeywell will relocate its world headquarters in Morris Township to a newly built, but never occupied facility in Morris Plains. Indeed, the five-story office building in which I sit as I write this article is approaching a 45% vacancy rate!
In short, a critical mass of darkened office buildings in New Jersey’s suburban communities is developing. But they are too important to the local and state economy to allow them to lie fallow for very long.
More and more, New Jersey municipalities are faced with this growing trend and need to figure out how to react to it. Developers are beginning to seek zoning changes to convert these buildings and/or sites to residential use. Many town officials worry about the impact from the influx of new residents on schools and other public services. Should they resist such requests for rezoning and hope the market comes back? While it is tempting to turn a blind eye toward these requests, there are dangers lurking in that response. For example, if left vacant, these buildings can become “black holes” that drain energy and vitality from areas of the community that are typically in high profile locations. This effect can taint other properties and gradually lead to an overall decline in property values, and thus , tax revenue, for the entire town.
These buildings are in desirable and treasured locations. For the most part, they are in areas with extensive and functioning infrastructure. They are most often served by public water and sewer and are near highways and sizeable road networks. Some are not far from one form or another of public transportation. But, more importantly, in a state with rapidly diminishing growth areas, they occupy real estate that can absorb the development opportunities that have shrunk in recent years.
I served on the State Planning Commission when the current State Development and Redevelopment Plan was adopted in 2001. In the relatively short time since then, there have been a series of important preservation steps that have been taken. These actions include: the approval of a Referendum to spend $1 billion over ten years to acquire one million acres of open space and farmland; the adoption of the Highlands Act which establishes a strict development regime for over 853,000 acres in northern New Jersey; the acquisition of open space by counties and municipalities throughout the state with the use of Open Space Trust funds; similar acquisitions by non-profit organizations; the designation of multiple miles of Category One streams, which means that development is restricted within a 300 foot buffer on each side of the stream and the adoption of more stringent storm water regulations, which make development more difficult in certain areas. The contribution that Super Storm Sandy has made to this list of sites that can no longer be developed will become clearer as time goes by.
In order for the economy to be vibrant and to grow, the state will need to harness all of its assets to develop in the right place and in the right way. These sites provide one of a number of resources to address this need.
The creative re-use of these buildings can provide multiple benefits. In some cases, there will be opportunities to transform these sites – and maybe the buildings too – from single purpose, part-time uses to multiple uses, which could include retail, office, residential and public purposes. The separation of residential from retail and both from office use is a relative recent practice. While mixed use development/redevelopment won’t work everywhere, where it does make sense, there a multiple benefits.
A mix of uses makes perfect economic sense: for example, parking can server some uses during the day and others at night. Round-the-clock activities in one location not only make for a more efficient use of land and infrastructure, but it also makes for a more interesting and lively neighborhood vibe. Instead of the exodus at closing time, which leaves these buildings lurking in darkness through the night, the area can include parks, restaurants, cafes and entertainment venues. On the upper floors, condos and apartments can provide housing for New Jersey’s growing population. The challenges are daunting, but with creativity and a fresh look at options, there can be a big payoff, not only for the locality but for New Jersey as well.