Quest Diagnostics’ proposed facility at the former Roche campus on Route 3 will be exempt from property taxes for three decades, thanks to a deal the City Council approved Aug. 21.
Instead of a requirement for property taxes, the city and Quest came to terms on a payment in lieu of taxes, or PILOT, agreement. It means that instead of taxes based on the property’s assessed value, Quest will pay an annual flat sum – about $800,000 in the first year – to the city.
Over 30 years, the annual payments will increase to about $1.4 million.
Councilman Steven Hatala called this a good deal for the city because the payment will bring in about four times what the city currently collects in taxes for the 12 acres that are being redeveloped.
It also means a number of jobs, some that are to be relocated to the facility and others that are being created there, Hatala said.
“If you do it right, you can make a grand slam out it,” he said.
Quest is one of several companies that have come since Prism Capital of Bloomfieldpurchased the campus.
Prism, which has been marketing the campus as ON3, bought the site shortly after Roche announced its plans to close the location in 2012 and lay off about 1,000 workers.
Clifton and Nutley lost $15 million in annual taxes, and officials in both communities were eager to to redevelop the property with industries offering high-paying jobs. Through ON3’s plans to redevelop the site, both municipalities are hoping to recoup the lost jobs and taxes.
Quest would occupy roughly 250,000 square feet of space, relocate some 754 jobs from its Teterboro location and create an additional 384 jobs, according to figures Quest provided to the state’s Economic Development Authority.
Of the additional jobs, 269 would be relocated from Pennsylvania and Maryland, and 115 more would be new. The median wage of these jobs is $54,000, according to the development authority.
The influx of people working at Quest, combined with the students, faculty and staff at the Hackensack Meridian School of Medicine at Seton Hall and a cancer research lab, are expected to boost the sales at nearby shopping hubs like the Styertowne Shopping Center and Clifton Commons.
Clifton Councilman Joseph Kolodziej said he agreed with Hatala’s assessment, even though with the PILOT agreement the city’s schools won’t receive additional revenue. The number of jobs that come with Quest’s developing of the site make it worthwhile.
“Now there’s an anchor on both ends of the property, the medical school and Quest,” Kolodziej said.
Quest officials declined to comment on the PILOT agreement.
In addition to the local property tax exception for Quest, the EDA, through the Grow New Jersey Assistance Program, approved $5.51 million in annual sales and use tax exemptions for 10 years to Quest.
Quest’s plan to build the new facilty, which includes a multilevel parking garage, has already been approved by the city Planning Board. Demolition work has begun to remove several structures that existed on the site.
Quest officials declined to provide a time line for when they expect to be able to occupy their new facility.
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