Corrections or additions?

This article by Barbara Fox was prepared for the January 10,

2001 edition of U.S. 1 Newspaper. All rights reserved.

Life in the Fast Lane: Sarnoff

Sarnoff Corporation’s research and development engine

has gone turbo. No longer content with fueling much of the R&D

excitement

in the Route 1 corridor, it now aims to develop real estate. Move

over, Forrestal Center, here comes a powerful research park. Make

way, Carnegie Center, Princeton’s getting another office campus.

Ever since the glory days when General David Sarnoff was at the

forefront

of television technology, this beehive of techno-talent has been

sitting

pretty on 336 acres of prime real estate. The current building dates

back to 1941, when the rest of Route 1 was a cow pasture, before the

office parks sprang up. Sarnoff now has a total of 600,000 square

feet, a very small buildout for

a very big plot, surrounded by sloping green lawns and ballfields.

Meanwhile the company lost the security blanket of its nonprofit

status.

No longer the favorite puppy of RCA, Sarnoff now must scrap for

itself,

as the for-profit arm of California-based SRI. The business model

— to spin off

start-ups, while keeping equity and the original employees — is

working. But who knows what the next decade will bring?

It’s time, says CEO James Carnes, to leverage all the assets,

including

real estate. Building an R&D park would bring in development revenues,

but it would also help Sarnoff attract new employees and house its

own spinoffs. Carnes hopes to break ground in 2003 and aims for a

10-year-buildout.

While some neighborhood opposition has already surfaced, the

development, if approved, could total 3,530,000 square feet with about

20 buildings,

varying in height between three and six stories, including a hotel

that fronts on Route 1 and a conference center on a site adjacent

to the railroad tracks. It could have four separate entrances (two

with traffic signals) off the proposed Millstone bypass, but another

version of the plan would not require using the bypass, which has

yet to be approved.

Until last Thursday Carnes kept the plan under wraps, limiting

discussion

to Susan Gauff, senior vice president for people and communications;

Walt Schmidlen,

director of facilities; and Jim Crofton, CFO, plus some technical

people who were in a focus group for the architects.

Dean Lundahl won the development contract for the Advance Group in

March. Based in Bedminster, it is developing two sites at the Carnegie

Center plus some in Trenton and Ewing, and has an office for Lundahl

in the Bovis building at Vaughn and Alexander roads.

Lundahl submitted a concept plan to West Windsor on December 15, and

next will come the general development plan, getting the design of

the building approved, and lining up financial partners. Last

Thursday,

January 4, the company unveiled its proposal to the research staff

and met with the neighbors on Fisher Place. Early in February, Carnes

hopes, it will go to the planning board.

"If we develop it to the maximum we are significantly below the

maximum floor to area ratio allowed in the township," says

Lundahl.

The maximum is 30 percent he is proposing 24 percent. "More

important, we

have done the development primarily with structured parking garages,

which makes the cost significantly higher but translates into much

more open space. The maximum "impervious" coverage is 50 percent

and Lundahl has asked for 26.5 percent.

Lundahl has signed up Cambridge-based Stubbins Associates Inc. for

the master plan with Ron Ostberg as the lead architect. Rothe-Johnson

of Edison is the co-architect, and Schoor DePalma of Manalapan will do

the

engineering.

The Stubbins name carries weight in Princeton because it

was the master planner for the much vaunted Carnegie Center campus.

"With Sarnoff as the anchor, and the rest of the campus feeling

a lot like the Carnegie Center, we think there is a lot of

opportunity,"

says Carnes. As the head of the committee that built Penn State’s

new alumni center, Carnes learned that "getting the right

architect is really important."

"Initially we thought we needed a new building — to move

everyone

over and bulldoze the old building — but our integrated circuit

facility has a lot of expensive equipment, and much of our business

depends on a continuous output," says Carnes. "We couldn’t

afford to replicate the equipment in a second place and could not

survive with three-to-four month downtime. We were scratching our

heads a lot."

"They came up with a clever way to use the current building —

build a new wing and take out old stuff," says Carnes.

"Ironically

we will probably lose our `new wing,’ which is 30 years old, and we

will keep our old wing, which is 60 years old. It will give us a

totally

new look — a modern building while maintaining current

operations."

Carnes hopes the campus will be good for recruitment. "What

we call the War for Talent, developed to an acute degree over the

last couple of years, really got us thinking about how important it

was to have a better facility," says Carnes. "The look and

feel of the building did not reflect the vitality of the organization,

and it was sending the wrong message to the recruits." With its

labs separated by rambling hallways, this building could seem like

a dinosaur to a Silicon Valley techie who is used to working in a

flexible and collaborative environment. "While we depend on

collaboration

and cross-pollination here, our building is antithetical to that,"

says Carnes.

It could also benefit the incubation process. Sarnoff has some notably

successful spinoffs — Orchid BioSciences, Songbird Medical, and

Delsys Pharmaceutical for instance — and the next generation of

spinoffs could be incubated close by the parent. "We are going

to be generating companies on a continuous basis that we hope will

need substantial space and see value in being close to us," says

Carnes.

"In many cases we continue to serve as the development arm of

these companies. But clearly they all want to be their own entities

with their own entrance. That is all part of this plan to have very

separate facilities for different levels of incubation versus mature

operation."

"All of the building owners in the Route 1 corridor benefit from

the Sarnoff spinoffs," says David Knights of Picus Associates,

managers of the Forrestal Center.

Other high tech companies could be

housed here as well. "We believe we can attract the brightest

and best to be synergistic in what Sarnoff is doing," says

Lundahl.

"Certainly someone has to be the owner of the real estate, but

most of the buildings will be occupied by major corporations."

Their presence will contribute to Princeton’s "critical mass"

of technology-trained workers but could also be a double-edged sword.

Carnes warns that Sarnoff’s tenants might poach recruits from

Sarnoff’s

staff. But he believes the critical mass of people is a big ingredient

in Silicon Valley’s success and can only be good in the long run.

"We also envision a campus with a synergistic supporting

structure,"

says Carnes, "with infrastructure companies — the headhunters,

accountants, and legal folks.

"There is a huge difference between this and any of the other

parks on the Route 1 strip," says Lundahl, including the

now-stymied

RCN campus and the Merrill Lynch campus in that group. "Sarnoff

is going to control the development process, so they have a vested

interest in being sure this is being done correctly. Sarnoff people

are trying to do this in the right way."

— Barbara Fox

Sarnoff

Corporation, 201 Washington Road, CN 5300, Princeton 08543-5300.

James E. Carnes, president & CEO. 609-734-2000; fax, 609-734-2040.

Home page: www.sarnoff.com.


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