Two years of talking has not ended the acrimony. After nearly two years of task force and committee discussions, the Princeton Regional Planning Board will finally get a chance to look at the proposed zoning changes for properties that the Princeton hospital will sell when it moves. At a master plan subcommittee meeting last week, a public hearing on the proposed master plan change for the main building was set for Thursday, October 20, at the Princeton Township Community Room.
All the discussion has not tamped down the community’s resistance to the proposed changes in the master plan. When the master plan subcommittee tried to approve a draft of the proposal, it met with antagonism. Neighbors wanted to cut the density. Barclay Knapp, whose bid to build a Continuing Care Retirement Community (CCRC) had been rejected by the medical center in private, tried to present it again, this time in public. He did not get very far.
The Princeton Healthcare System currently has 510,000 square feet of space on two sites (the main hospital and Merwick) on 12 acres of land in the borough and the township. The subcommittee proposed that the next owners could keep – or build – 510,000 square feet of "mixed use" space, mostly residential, with a small amount of office and retail space allowed. If the maximum is allowed, 20 percent of that would be set aside for affordable housing.
Most neighbors objected to the idea of new owners razing the current buildings and rebuilding the same amount. "I do not think it is the landowner’s right to sell the land at the same density for non-hospital uses," said Dave Handelman, a robotics researcher who lives on Moore Street. "I see no proof that hospital would not be able to sell the property with less density. I think it would be out of scale with the surrounding neighborhoods."
But if the medical center does not get a reasonable return from the sale, suggested Marvin Reed, a member of the subcommittee, "they are not necessarily going to move. They may close."
How much would be enough? In a telephone interview after the meeting, Reed said that the possibility of closing was only his opinion, not something he had heard from the hospital. The hospital has never revealed the number it needs. Nevertheless, Reed said, a consultant to the task force did estimate that $60 million is the sum the hospital needs to realize from the sale of the two properties.
Some think Princeton’s donors have deep enough pockets to provide whatever is needed. "The hospital will be able to move no matter what valuation it gets," said Sheldon Sturges, co-chair of the Princeton Future organization, in a telephone interview. "There is a quest for inclusion in this town. We need to find places with a fair amount of affordable housing." Members of his organization, pushing for a greater percentage of affordable housing, hope to coordinate planning for hospital sites with an expansion of the affordable housing currently on Franklin and the Stanworth housing that is owned by the university.
Asked to clarify its position, the hospital replied: "Discussions have centered on 510,000-square feet, with 20 percent of that designated as affordable housing. This would be beneficial for area residents who are interested in affordable housing options and would help to provide the necessary resources for the hospital to relocate."
On Knapp’s CCRC proposal, the hospital’s response was more definite:
"We received many proposals in response to our Request for Proposals. Only one of them included plans for a CCRC. This proposal was reviewed and eliminated because it was not competitive with the others. There are no plans to reconsider this proposal."
At the meeting Princeton Healthcare’s CEO Barry Rabner explained that Knapp’s proposal never reached his desk. "It was so far behind the others that it was dropped out." That’s not good news for Knapp. Until this time he had been bound to observe a non-disclosure agreement. Knapp took advantage of the public meeting to talk about his proposal to establish a CCRC at either of the two sites. He has partnered with David Freshwater of the Fountains, an eminent CCRC developer from Arizona. Earlier this year (perhaps after the bid was submitted) Freshwater’s company was bought by Sunrise Senior Living, the nation’s largest provider of senior-living services.
Knapp, the son of an United States Air Force pilot, grew up in Nebraska. A 1979 graduate of Johns Hopkins with an MBA from Harvard, he has established four successful telecommunications companies, including NTL, billed as the largest cable television provider in the United Kingdom. His Princeton-based firm, Charles Street Partners, hired Ross Woolley of Witherspoon Street-based Woolley Morris to do the site plan, and Anne Studholme of Hill Wallack is the attorney.
Knapp insisted his proposal was financially credible. "The hospital can get its regular return and incorporate affordable housing at lower density. At Merwick we could get more green space."
"It is not for us to decide which bidder buys and develops the property," said Reed at the meeting. Reed expressed surprise that the bidding has gotten so far along. The hospital now says it has narrowed more than three dozen bids down to three. "I’m surprised that until we actually change the zoning anybody can make a final bid," said Reed. The master plan subcommittee plans to discuss the rezoning of the Merwick site in an evening meeting on Tuesday, October 18.
Shop Till They Drop
For the first time in nearly 20 years, upscale fashion shoppers may have new stores to get excited about at Quakerbridge Mall. Mall owners have announced it would expand by nearly 60 percent and add two new department stores plus a parking deck for a total of 1.65 million square feet of retail space.
The company’s stated goal, to "take the tenant mix up a notch," has prompted some "shop-till-you-drop" types to fantasize about stores like Nordstrom’s or Nieman Marcus moving in.
But nothing is official, only this statement from Robert Spaulding, senior vice president of development at Indianapolis-based Simon Property Group: "Upscale fashion retailers are especially anxious to explore the opportunities." The cost of the project has not been released.
Look at the intersection of Quakerbridge Road and Route 1 and it is clear that the mall owners are making a preemptive strike to siphon off retailers who might be tempted to wait for the development of the American Cyanamid/Wyeth property, which sits on the only empty corner. When this property was owned by the Rouse Corporation, there was talk about changing the zoning to accommodate high end retail, but after Rouse was bought by General Growth, the talk stopped. For two years not much progress has been made on that site’s development plans.
The other two corners are occupied by Nassau Park, a successful big-box mall anchored by Wal-Mart, and Mercer Mall, which is undergoing major renovations. Quakerbridge, the oldest of the three,was built in the mid 1970s by Kravco, based in King of Prussia, Pennsylvania.
Kravco sold its interest in Quakerbridge to Simon Properties, the largest owner of high-end retail malls in the country, but some Kravco principals continue to have ownership interests in the mall and have formed Kravco Simon Ventures. Simon has 295 properties in 40 states and Puerto Rico, plus it has 51 shopping centers in Europe and five outlet centers in Japan.
"We will be asking Lawrence Township to explore the rezoning to allow for the density that we envision for the potential expansion," says Jonathan Epstein, of the College Road office of Drinker, Biddle & Reath, representing the owners. Epstein hopes to get through the zoning process by the end of the year.
Epstein notes that very few 1 million square foot malls go through a major expansion. "In New Jersey, the only one that comes to mind is Menlo Park."
State Offices Sold
One of the biggest transactions in Central New Jersey took place just three miles from Route 1. Just announced: the sale of Quakerbridge Plaza for about $65 million to the owner of Princeton Shopping Center, George Comfort & Sons, a New York-based private equity fund. Built in the 1980s and 1990s by Samuel A. Fruscione, the 426,000 square foot center on Quakerbridge Road has, as its major tenant, the State of New Jersey, which leases 90 percent of the space.
Fruscione built Quakerbridge Plaza in stages in the 1980s and `90s. He is the son of the late Joseph L. Fruscione, who founded the family firm in 1948. At first the company sold and installed floorcovering, but then the focus changed to construction and development. Samuel’s son, Joseph E. Fruscione, is now working at the firm, as is his son-in-law, B. Jason Penzone.
Over the years, the Frusciones have built more than 1 million square feet in Mercer County, including a 10-story building at 140 Front Street now occupied by the state department of law and public safety; the professional offices at 123 Franklin Corner Road; the Bristol-Myers Squibb Clinical Research Center on the campus of RWJ Hospital at Hamilton; and the corporate headquarters for Congoleum, which relocated from University Plaza.
The Fruscione Company’s next project will be the Hamilton Clocktower Corporate Center, leasing now for next summer. Princeton architect Steven S. Cohen has designed this 172,000 square foot Class A project on Kuser Road at Exit 3 of I-195 in Hamilton. The three two-story brick masonry buildings, ranging from 48,000 to 65,000 square feet, will have ribbon windows and center atriums. One of the main site features will be a 2.5-story clock tower in the traffic control circle at the entrance drive that bisects the site," says Joseph Fruscione.
Milton Charbonneau, vice president of Colliers Houston, will market the Clocktower property. He also represented the Frusciones in the sale of Quakerbridge Plaza. "George Comfort & Sons are perfectly suited to own and manage this project for the State of New Jersey, which complements their existing portfolio well," says Charbonneau.
Among the state tenants of Quakerbridge Plaza are New Jersey PAAD: Pharmaceutical Assistance for Aged & Disabled, New Jersey Higher Education Student Assistance Authority, New Jersey Division of Family Development, and New Jersey Department of Human Services. The remaining space is taken by two dentists, a handful of doctors, a radiology practice, an insurance broker, and the developers. The Frusciones have not decided whether they will move or stay.
The Fruscione Company LLC, 6 Quakerbridge Plaza, Building 6, Suite 101, Box 3245, Mercerville 08619-3245. Joseph E. Fruscione, vice president. 609-586-2000; fax, 609-586-3324.
Small can be better, for developing drugs, but successful small companies soon grow big, especially those with esprit d’corps, says John T. Spitznagel, CEO of Esprit Pharma. Apparently the venture capitalists agree with him. With $63 million in funding, this young company, based in the PNC building at Tower Center in East Brunswick,made the top 10 list of venture-capital funded U.S. companies in the second quarter of this year.
Esprit’s first drug is for overactive bladders, and its second is for urinary tract infections. On September 16 it announced the purchase of its third product. Expect more. "We think we have the opportunity to roll up major companies in the urology space," Spitznagel says, explaining how Esprit wants to buy single product companies and products that have yet to be developed in such areas as prostate, kidney, or bladder cancer. "We look to become strong allies of the OB-GYN community as well."
Much of Esprit’s reputation is based on the reputation of its CEO. Spitznagel was the former CEO of Roberts Pharmaceuticals and ESP Pharma, which sold for a total of $1.7 billion. In turn, Spitznagel relies on the team he has worked with before.
Bob More, representing Domain Associates on Palmer Square, was one of the lead investors in both Esprit and its predecessor, ESP Pharma, which began operating three years ago. "We are trying to help support entrepreneurs like John and his team," says More in a telephone interview. He was packing his office, at that moment, to move to California, where he will open a new Domain Associates office in San Diego. "If they can do what they have done in the past, they will be a very successful management team and we are pleased to be involved." Other Esprit investors include New Enterprise Associates and Apax Partners.
Spitznagel, the 2004 recipient of Ernst & Young’s Entrepreneur of the Year award for the New Jersey pharmaceutical industry, is the son of an entrepreneur who had started a plastic molding company in Rochester. He graduated in 1963 from Rider University and has an MBA from Fairleigh Dickinson. He and his late wife had a son and a daughter, and he remarried three months ago. His son, a graduate of the University of Pennsylvania’s Annenberg School, worked for Eli Lilly before joining his father in the start-up business.
The senior Spitznagel’s career began at Warner-Lambert, followed by stints at Hoffmann-La Roche and Wyeth. As president of the Reed and Carnrick division of Block Drug from 1990 to 1995, he turned around the division and sold it. In 1996, doing a turnaround of Roberts Pharmaceuticals, he quadrupled its worth, and sold it to Shire Pharmaceuticals in 1999 for about $1.2 billion.
Then he tried to retire. "I was sitting on boards and doing consulting when I came across the guys who were trying to get ESP Pharma going. I liked them, I liked their business model, and they gave me free rein to tweak it and make it stronger. Also, the investors said they wanted someone to `do it’ who had `done it’ before," he says. Domain was the co-lead investor.
ESP Pharma bought one product, was developing more products, and was in the process of preparing an IPO when it had sell-out offers from six bigger firms. The eventual buyer, California-based Protein Design Labs, paid $350 million in cash and $150 million in stock. Then Spitznagel took the same team to found another company, Esprit Pharma. "We have worked together before. We are all of similar mind and we have a lot of fun – we kid around a lot but everyone enjoys making a contribution," he says. "Humor is a great way to bring people together. And we focus hard to find different ways to solve problems."
One of Esprit Pharma’s first deals came from a company that had been led by Richard S. Lane (who is currently negotiating with the Securities and Exchange Commission on how he kept the books for Bristol-Myers Squibb). Esprit took over Lane’s firm, Saturn Pharmaceuticals, along with Saturn’s rights to an overactive bladder treatment, Sanctura.
Overactive bladder syndrome is said to affect more than 30 million patients in the United States, and this figure could be larger, due to under-diagnosis. Esprit is copromoting Sanctura with Indevus Pharmaceuticals but it has also hired some of the sales people from the company that had been selling Sanctura.
Late in July Esprit licensed Proquin SR, a drug for urinary tract infections, from Depomed. It will pay Depomed $30 million now, $10 million within the year, and $10 million in two years, plus royalties of 15 to 25 percent. It expects to launch Proquin by the end of this year.
On September 16 Esprit acquired Metagen Pharmaceuticals. With the purchase came a urinary analgesic/antispasmodic/antiseptic drug called Prosed EC.
Spitznagel admits that the market for some of diseases is "fairly well saturated" but notes that, as a a small company, "you have to stay in the cracks; a little company like us can get blown away by the big pharmas. But you can still do a terrific job for patients with small products that big companies can’t afford to bring to the attention to the prescribing community."
Also, he is not the least bit disappointed that he didn’t get to take ESP Pharma public. "Once upon a time it would have been a great ride, but these days, with Sarbanes-Oxley and the expense that entails, I was happy to do a private sale."
"In my view," says Spitznagel, "you don’t always run the business in the best longterm interest if you have to make your quarterly number. "His family’s mantra: "This ain’t no dress rehearsal, this is the real thing." In other words, if you are going to something do it the best you can, you are not just practicing, this is life and the only one you will ever have. "My kids throw it right back at me," he says.
An advocate of niche pharmaceuticals, he also advocates niche marketing direct to doctors and opposes direct-to-consumer marketing as seen on television, on the Internet, and in print. "My view is that they shouldn’t allow it. It is the opposite of what good marketing should be about, which is to take the audience you are trying to address down to the smallest number possible and spend your resources on that small segment."
"You can be successful going to 10,000 people, but when you go to consumers you are addressing 50 million people when only 5 to 10 million people have the disease. It causes undue pressure on the doctors," he says, "and I don’t think it encourages best practice. It also increases the price of drugs. If you have to spend $100 million to compete, versus marketing to a group of physicians, somebody’s got to pay for it."
Esprit Pharma, 2 Tower Center Boulevard, East Brunswick 08816. John Spitznagel, CEO. 732-828-9950; fax, 732-828-9954. Home page: www.espritpharma.com
The new owner of Lenox has not announced whether the headquarters office will need to move from Princeton Pike. But it did say that the Pomona factory will close on November 14 and that the New Jersey jobs – making fine ivory china – will move to a factory in Kinston, North Carolina.
The Kinston plant employs more than 400 people and makes 4 million pieces of china in 100 different china patterns, including some bone china. The Pomona work will add another 2 million pieces annually. Lenox is reportedly the only manufacturer of bone china in the United States.
Lenox has its headquarters in a 40,000 square foot building designed by Geddes Brecher Qualls Cunningham. Other Lenox facilities are in Langhorne, Pennsylvania, and Hagerstown, Maryland.
In June Department 56 said it would buy Lenox Incorporated from Brown-Forman Corporation for $190 million. Brown-Forman also sold these brands: Kirk Stieff silver, Gorham, and Dansk. Department 56, located near Minneapolis, designs, distributes, wholesales, and retails fine quality collectibles and other giftware products.
Many of the Lenox showrooms nationwide will be closed, but not the one on Commerce Drive. "We’re not going anywhere," says a salesperson who answered the phone. "We’re doing well."
Lenox Inc., Lenox Products Group (BFB), 100 Lenox Drive, Lawrenceville 08648-2394. Jay Hanauer, CEO. 609-896-2800; fax, 609-895-0139. Home page: www.lenox.com
Lenox China Store, 53 Commerce Drive, Cranbury 08512. 609-395-8051.
Stephen J. Hyland of Hill Wallack represents Betty Jordan, whose domestic partner died without a will, in a lawsuit filed on Friday, September 16, in Middlesex County Superior Court. Hyland claims that under the Domestic Partnership Act of 2003, Jordan has a right to inherit from her diseased spouse, Rene Price. Though the couple had formally registered as domestic partners, the courts have said she is "unrelated."
Antoinette Holland of Malapero & Prisco of New York and Red Bank is co-litigator in the case, entitled Price vs. State of New Jersey. "Under New Jersey’s probate law, a surviving spouse is legally entitled to the entire estate when their spouse dies intestate (without a will) and without descendants" said Hyland in a statement.
Under the current ruling, if all of Price’s relatives relinquish their claim, the estate would be turned over to the state of New Jersey. "Even the Appellate Division, when it denied the right to same-sex marriage in the Lewis case, recognized that denying rights such as these to registered domestic partners amounted to a denial of equal protection," said Hyland. "And so we are taking the court at its word."
Hill Wallack, 202 Carnegie Center, Suite 200, CN 5226, Princeton 08543. 609-924-0808; fax, 609-452-1888. Home page: www.hillwallack.com
Three defendants in the Mercer County Improvement Authority fraud and bribery case were sentenced to jail terms on September 19 in the court of U.S. District Judge Garrett E. Brown. James R. Lambert Sr., 44, formerly the MCIA executive director, will spend five months in federal prison, be under house arrest for five months, have three years of probation, and pay $6,000 in fines.
Lambert had pleaded guilty to charges of mail fraud and conspiring to bribe Alfred W. Bridges, former mayor of Ewing Township, to help steer a private demolition contract.
Alex J. Abdalla, 52, former owner of Central Jersey Waste in Washington Township, took the same plea and received the same sentence. Both Abdalla and Michael Maurio, a contractor in Hamilton, are supposed to repay $100,000 to the MCIA.
Maurio had not cooperated with authorities in the three-year federal investigation, and he was sentenced to 23 months. The judge said that because Maurio has a heart problem he will be in a federal prison with an appropriate medical facility.
Lambert had helped investigators prove the case against Harry G. Parkin, who had been chief of staff to former Mercer County Executive Robert D. Prunetti. Parkin was sentenced last month to 7 1/2 years in federal prison for his part in the scheme.
Premier Exteriors, a full-service remodeling company that focuses solely on windows, siding, doors, and roofs, opened its first showroom at University Plaza in Hamilton at the beginning of this month. While Premier makes house calls the showroom displays specific products that are better appreciated by touch and sight.
Shannon O’Brien, a New Yorker by birth who lives in Freehold with his wife, Alyssa, was previously vice president at the $30 million remodeling company, in his home eight years ago. Today his 12-person business has revenues approaching $2 million and, he says, is "young and aggressive."
Premier Exteriors, University Plaza, Hamilton 08619. Shannon O’Brien, president. 609-689-0606; fax, 609-689-0716. Home page: www.premier-exteriors.com
Leonard L. Van Hise, 85, on September 18. He founded a real estate agency in Hightstown.