Corrections or additions?

These articles by Kathleen McGinn Spring were prepared for the

August 22, 2001 edition of U.S. 1 Newspaper. All rights reserved.

Life in the Fast Lane: Real Estate

Adding to its already substantial real estate holdings

in central New Jersey, Bristol-Myers Squibb (NYSE: BMY) has purchased

the 134-acre tract on Princeton Pike in Lawrence that was to have

become a new corporate headquarters for RCN (Nasdaq: RCNC).

The pharmaceutical giant, whose worldwide medicines headquarters sits

just down the road on Route 206, paid $40 million for the land. RCN

had paid $25.5 million just one year ago, and planned to build a 1.5

million-square-foot complex. The telecom company, ensnared in that

industry’s woes soon after contracts on the parcel were signed, had

obtained approval from Lawrence Township to build 10 buildings on

the site, last used by Union Camp.

Nancy Bavec, spokesperson for RCN, says the land was sold because

"the need really is no longer there." The company, with

headquarters

at Carnegie Center, where it occupies buildings 506 and 105, saw the

price of its stock drop from $27 late last summer to under $3 earlier

in the spring. It is now trading at about $3.75. "We’re sort of

running a taut ship," Bavec says. "The current plan is to

be very prudent with resources, to be a lot more efficient with how

we operate."

RCN, which sells bundled communications services to residential

customers

over its own fiber optic network in selected big cities, is now

concentrating

on increasing sales in existing markets rather than adding new

markets.

Bavec says another change is that the company is moving away from

a centralized operation to one where each market has more

responsibility

for its bottom line. The result, she says, is a need for less support

staff at headquarters, and no current need to build a larger

headquarters

building.

RCN has retained an option to build on the land, but Bavec says

"we

don’t have any plans to do so now." Under terms of the sale, RCN’s

building could be as large as 403,000 square feet, and the company

would occupy it as a tenant. Bevac says that, for now, RCN plans to

stay in Carnegie Center.

Bristol-Myers does not have concrete plans for its new

land. "One of the things Bristol-Myers looks at is its future

in New Jersey," says Tracy Munford, community affairs manager.

"It looks at the state as a whole, and at the central Jersey

corridor

in particular." The 134-acre site, so close to its front door,

could be used for expansion, but the company does not have anything

specific in mind.

The company is moving to landscape the site and "make it more

presentable to the public," says Munford. RCN had demolished

structures

on the site, and dug the foundation for one building. Bristol-Myers’

landscaping plan has been approved by Lawrence Township, Munford says.

An important element is the preservation of the Brearley Oak, the

site’s most impressive tree, believed to be about 250 years old.

RCN, a standalone public company for only four years, is but an acorn

compared with Bristol-Myers, whose roots go back as far as 1887. As

RCN is retrenching, Bristol-Myers is expanding. In addition to

purchasing

the land on which a new RCN headquarters was to stand, it is planning

for two new buildings on its Lawrence campus, most probably to be

used, Munford says, to house administration offices and labs. In

addition,

the company is developing 433 acres in Hopewell, where it has 1

million

square feet of office and laboratory space and development rights

to add another 1.8 million square feet.

— Kathleen McGinn Spring


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