Friday, December 02, 2005


Jones Lang LaSalle

Spectra East Re-Ups, Expands to 106,000 SF
By Eric Peterson
Last updated: December 2, 2005 08:34am

(To read more on the industrial market,
click here.)
ROCKLEIGH, NJ-Spectra East has renewed its existing lease of nearly 85,000 sf of office space and added 21,000 sf on top of that, bringing its total occupancy at Rockleigh Corporate Center to 105,613 sf. The company, which is the US subsidiary of the Germany-based Frensenius Medical Care, an integrated provider of products and services for kidney dialysis, uses the space for executive offices, customer service, IT functions and labs.


Located at 8 King Rd., Rockleigh is a two-building, 182,000-sf asset that is currently 100% leased. Other tenants at the complex, which is owned, managed and leased by GHP Office Realty of White Plains include the New York Times and 3M Medical Equipment.


"We have committed to an intense capital program at the building since we purchased it in early 2000," says Andrew Greenspan, a principal of GHP, the office building division of Houlihan Parnes, who describes the transaction as "one of the largest leases in Bergen County this year.”
"Spectra East operates 24 hours a day, every day of the year. We needed to invest in the appropriate building infrastructure and management procedures to convince the tenant that this is where they should maintain their headquarters and laboratories for years to come,” he adds.


Before it was acquired in March 2000 from JP Morgan, the asset was last renovated in 1998. It was built in 1973, and Spectra East occupies the east building of the two-building complex. Besides being described as "long term," the details of the transaction were not released. However, a small block of sublet space within the complex is currently listed for $18.50 per sf for a five- to 10-year term.

To complete Spectra East's growth within the complex, Phil Fruchter of Papp Architects of White Plains designed the new office and lab space. Anthony Nardozzi of the Stamford, CT-based New York Connecticut Development oversaw the renovations. The site houses 250 of Spectra East's 1,200 employees in the US.

Thursday, December 01, 2005

Jones Lang LaSalle

$430 a Square Foot, for Air? Only in New York Real Estate
By CHARLES V. BAGLI

The price of air has gone up in Manhattan.
It's now $430 a square foot.
Two New York City developers have agreed to pay a record-setting amount for "air rights" so they can build a 35-story apartment tower with views of Central Park from the high floors.
The brothers William L. and Arthur W. Zeckendorf are set to pay $430 per square foot - more than twice the going rate - for unused air rights over Christ Church and the Grolier Club at Park Avenue and East 60th Street. Christ Church will collect more than $30 million; Grolier will get about $7 million.

Air rights allow developers to build taller by buying the space over low-scale buildings and transferring it (on paper, if not in reality) to spaces over adjacent buildings. Although such transfers occur elsewhere in the country, the prices do not run as high as they do in Manhattan, which, after all, is an island and generally provides developers with one option: up.
The rights will be transferred to a site west of the Grolier Club on East 60th Street, where the Zeckendorfs and their partners own three tenements that are to be demolished.
If it all goes as planned, the developers will be able to build a taller tower than the zoning ordinarily allows. In a separate deal with Christ Church, the tower will also have a coveted Park Avenue address, despite its location on 60th Street.

The Zeckendorfs are third-generation developers. The brothers disagree with experts who warn about a bursting housing bubble, at least when it comes to what the Zeckendorfs call "super prime" areas.

"We want to concentrate on the very high-end market where we see tremendous strength and a limited inventory," Arthur Zeckendorf said.
M. Meyers Mermel, a real estate broker and a trustee of Christ Church who helped negotiate the deal, said the money would help sustain the Methodist church's programs. Carolyn L. Smith, president of the Grolier Club, a storied society of bibliophiles, confirmed that her club voted on Monday night to approve the deal. Previously, New York appraisers say that the high end for the price of air hovered around $200 a square foot.

"Nothing shocks me anymore," said Daniel F. Sciannameo, an appraiser at the Albert Valuation Group. "This market is absolutely crazy."
Jones Lang LaSalle

Economists: NJ's prospects moderate, but losing high-tech jobs
12/1/2005, 5:07 p.m. ET
By BONNIE PFISTER The Associated Press

TRENTON, N.J. (AP) — Information released Thursday by the Federal Reserve Bank of Philadelphia suggests brighter prospects for the state's economy, even as a Rutgers University study reported an erosion of high-tech jobs.

The Garden State lost 14 percent of its technology employment from 2000 to 2004, with the number of pharmaceutical jobs shrinking here even as they swell nationally, according to a report commissioned by the state's Commission on Science and Technology.

Sometimes called the "nation's medicine chest" because of its many drug makers, New Jersey "is on its way to becoming a handbag," said Joseph Seneca, a Rutgers professor who co-authored the report.

Demand for short-term profits has prompted private industry to cut back on research, Seneca said. That has pushed R&D to university-based centers, and he said New Jersey would do well to make sustained investment there.

Seneca said acting Gov. Richard J. Codey's proposed $150 million stem-cell research center at Rutgers, the state's public university, is among initiatives that could stem the erosion of high-tech jobs.

"New Jersey has always been an innovative state from Thomas Edison on. ... It's a good location, and a high quality of work force," Seneca said. "We're calling for the state to make investment to try to grow in science and technology, where we have been leaders."

Overall, however, New Jersey's outlook for growth has improved somewhat in the past month, said Ted Crone, an economist at Philadelphia's Federal Reserve Bank.

The bank noted the already-low jobless rate declined and businesses got busier in both hours logged by manufacturing workers and delivery of goods.

The unemployment rate fell half a percentage point to 3.9 percent in October, although overall employment, still just over 4 million, declined slightly
"But that is still above (the number of jobs) in August, so we gave back some of the gains in September, but not all of them," Crone said.

The jobless rate nationally last month was 5 percent.
Less rosy, however was the increase in unemployment claims and a decline in new home building.

Housing permits declined slightly to just under 2,000 in October, while initial unemployment claims grew by 4 percent in October.

Again, that figure was still more positive than August's showing, suggesting the state's economy is growing at a normal rate.

Overall, "this is better than last month," Crone said. "Last month growth was modest. This month we're moderate. Modest is a shade lower for us."

But on the heels of such news as New Jersey-based Merck & Co.'s 7,000 job cuts globally through 2008 — including 250 right way in Rahway — no growth is likely in the pharmaceutical industry anytime soon, Crone said.
Jones Lang LaSalle

GlobeSt.com UPDATE: Merck Details Initial Plant Shutdowns
By Eric Peterson
Last updated: December 1, 2005 08:16am

(To read more on the industrial market,
click here.)
WHITEHOUSE STATION, NJ-Pharmaceutical giant Merck announced
earlier this week that it would close five plants and axe 7,000 employees, 11% of its work force, over the next three years in order to save up to $4 billion. Employees at four plants have already gotten the word, and it involves closing three of the four plants and cutting nearly 1,300 jobs.

According to published reports, the affected plants are located in Rahway, NJ; Danville, PA; Albany, GA; and Kirkland, Quebec. A spokesman for Merck confirmed the internal announcements and the information, but would not comment further.

The largest of the closures, as confirmed by the spokesman, will be the company’s Cherokee plant in Danville, PA. The plant, which makes bulk ingredients for the company’s finished products, has been in operation for 50 years, and the closure will result in the loss of 430 jobs.
The second closure, involving 350 jobs, is Merck’s Flint River plant in Albany, GA, which makes such products as Zocor, the cholesterol-lowering drug. According to a published report, Merck is already talking to some of the plant’s suppliers about a possible sale of the plant, but company officials would not confirm that.


The third closure will be the company’s plant in Kirkland, near Montreal, which makes such products as Zocor, as well as Fosamax and Vioxx. Operated by the company’s Merck Frosst division, the plant will be closed with a loss of 235 jobs. All three of the plants the company is shedding will either be sold “as-is” in operating condition to compatible users or closed and put on the market for general sale, according to company officials.
Least affected by this initial round of cutbacks is the company’s sprawling R&D and manufacturing complex in Rahway, NJ. The complex will remain in operation, and the cutbacks will involve 250 manufacturing positions. The bulk of the Rahway plant’s 4,300 employees are scientists and researchers.


The personnel cuts leave about 5,700 more to be determined, as well as one more plant closure among Merck’s 31 facilities around the world. The spokesman would not comment on further cuts.

In a prepared statement announcing the restructuring this week, company president/CEO Richard T. Clark termed the moves “an important first step in positioning Merck to meet the challenges it faces now and in the future. We are engaged in an ongoing effort to enhance efficiencies throughout the company and improve the way we discover, develop, manufacture and market our medicines and vaccines. We also plan to pursue improved approaches to R&D, marketing and sales.”

Jones Lang LaSalle

GlobeSt.com UPDATE: Hoboken W Hotel Breaks Ground
By Sean Ryan
Last updated: December 1, 2005 10:35am

Sean Ryan is associate editor of Real Estate New Jersey.
HOBOKEN, NJ-Ground has broken on the W Hotel’s first sojourn into New Jersey. Locally based Applied Development Co. will develop and own the facility on the Hudson waterfront facing Manhattan. Starwood Hotels & Resorts Worldwide, parent company of the W brand, will manage. The property is set for a fall 2007 opening. For previous coverage, click here.

In addition to its 225 rooms, the 25-story W will also feature 37 condominium units. Amenities will include a 5,000-sf Bliss Spa, more than 11,000 sf of meeting space and a bar with an unobstructed view of the Manhattan skyline. Gwathmey Siegel & Associates have been tapped to be architects for the project. Other Applied projects in Hudson County include the Shipyard mixed-use community north of the W site, the 1,813-unit Port Liberté condominium complex in Jersey City and the almost-completed Liberty National Golf Course, also in Jersey City.

“The hotel’s proximity just steps from the ferry terminal and PATH station will allow guests and residents to conveniently enjoy Manhattan’s business, cultural and entertainment venues,” said Michael Barry, principal at Applied. He also noted that it’s close to the Meadowlands complex, Newark Liberty International Airport and Hoboken’s downtown district.

Twenty W hotels are currently operating worldwide, with 13 more in development. Only three others have included residences. Starwood operates 13 hotels in New Jersey under different brands including the Sheraton Meadowlands Hotel & Conference Center, the Westin Princeton at Forrestal Village and the Sheraton Atlantic City Convention Center Hotel.
Jones Lang LaSalle

Software Company Signs 24,000-SF HQ Lease
By Eric Peterson
Last updated: December 1, 2005 10:21am

MT. ARLINGTON, NJ-Storis Management Systems has signed a lease for 24,432 sf at 400 Valley Rd., a 132,000-sf class A office building being developed by Mt. Arlington Development LP. The systems software company is moving its headquarters here from its existing location in Parsippany.


"The Parsippany location just didn't do it for us, based on our employees and local road patterns," says Storis' president and CEO Donald J. Surdoval. "Our move is also a highly complex one with intricate construction and fit-up considerations."
Randy Eigen, managing director of CB Richard Ellis, was the exclusive broker repping Mt. Arlington Development. Storis was represented by Eric Ladden of Cornerstone Realty. Terms of the lease were not disclosed.


The building is the newest part of what is now the four-building Mt. Arlington Corporate Center, where "leasing activity has been strong," says Williams J. Myrtle, managing partner of Mt. Arlington Development. Renovations are also under way at 100 and 200 Valley Rd., two of the campus' other existing buildings, and targets for the available space include headquarters, sales or other corporate operations.

And the building at 400 Valley Rd. is actually the first of what Myrtle terms "a new generation" of buildings at the center. Plans call for two more buildings, with ground slated to be broken by the end of the year for the second. The three buildings, including 400 Valley Rd., will add nearly a half million sf of class A office space to the site.
Jones Lang LaSalle

Lumber Retailer Building 35,000-SF Plant
By Eric Peterson
Last updated: November 30, 2005 09:51am

(To read more on the industrial market, click here. and for more retail coverage, click GlobeSt.com/RETAIL.)
MILLVILLE, NJ-DuBell Lumber Co., a Medford, NJ-based retailer with several stores in South Jersey, is expanding into the manufacturing business and is building a 35,000-sf facility here to house it. The facility, which is expected to be ready early next year, is located on a 14.5-acre in this city’s industrial park.


The cost of the project hasn’t been disclosed, with company officials saying only that it’s a “multi-million-dollar facility.” The project is getting done with some local and state help, according to plant manager Doug DiMedio, son of company owner Gene DiMedio. The City of Millville proffered a $90,000 urban enterprise zone grant to enable a rail extension. And DuBell also received a $4 million construction bond loan from the New Jersey EDA.

According to DiMedio, the company is launching an operation to make roof and floor trusses for new home construction. A wall panel production operation is also in the company’s longer term plans, and the new facility will have a 14,400-sf production floor to handle two separate lines. The company expects to initially hire 25 people, according to DiMedio, who also projects that the number of employees could swell to 50 within the next two years.
Jones Lang LaSalle

74,000-SF Cold Storage Building Hits the Market
By Eric Peterson
Last updated: November 30, 2005 09:57am

(To read more on the industrial market, click here.)
ROCKAWAY, NJ-Green Pond Road Associates, a local group, has hired Newmark to find a new occupant for its 92 Green Pond Rd., a 74,200-sf cold storage facility here. The asset is on the market for lease or sale, according to Newmark principal Daniel E. Frankel, who is handling the assignment along with senior managing director Robert A. Dinner of the firm’s Woodbridge, NJ office.


The building is currently fully occupied by Preferred Freezer, a Jersey City-based cold storage company that operates such facilities nationwide. Preferred Freezer is shedding the space as it opens a new and substantially larger facility in Newark and the building will be available as of January 1, 2006.

Newmark is marketing the building, targeting companies that require specialized cold storage space. Among the possible targets are food companies, supermarket and other food store chains and pharmaceutical companies.

Built in 1985, the facility is located on an 8.2-acre site near I-80. It includes a total of more than 51,500 sf of freezer space, 8,200 sf of refrigerator space, 7,500 sf of dry storage space and 7,000 sf of office and maintenance space.
Jones Lang LaSalle

100-Acre Industrial Site Sells for $6M
By Eric Peterson
Last updated: November 30, 2005 06:35am

(To read more on the industrial market, click here.)
WOODBURY, NJ- Preferred Real Estate Investments Inc., a Conshohocken, PA-based development company, has acquired a former industrial complex here for a price tag in excess of $6 million. Huntsman Corp., a Salt Lake City-based chemical company, was the seller. The 100-plus acres of land contain a vacant, four-building, 90,000-sf industrial complex that was for many years occupied by the seller’s Huntsman Polypropylene Corp. division.

The transaction was put together by Bill Goodwin, a senior vice president of CB Richard Ellis’ Philadelphia office, who arranged the agreement of sale on behalf of the seller and was the sole agent. The value of the property in the wake of the sale is likely not to be in the site’s existing building stock, according to Goodwin, who terms the complex “essentially antiquated industrial buildings. The appeal of this property was in the more than 100 acres of developable ground at Exit 19 of I-295. It’s level land that has heavy utility services and active rail service, all of which make it appropriate for mixed-use development.”

Preferred has not disclosed its plans for the property. However, the firm, which could not be reached for comment, has a track record of mixed-use redevelopment projects in Pennsylvania and New Jersey.

Huntsman, a worldwide maker and marketer of commodity chemicals for a wide variety of industries, was originally known for innovations in packaging. But the company, citing excess capacity in the polypropylene industry, shuttered what officials termed “the oldest operating polypropylene plant in North America” in early 1999. The plant’s clients were passed off to other Huntsman production facilities in Texas and Michigan.

That closure came just two years after the company, which has its administrative headquarters on a brand-new campus in the Woodlands, TX, spent $30 million to expand and modernize the local plant at I-295 and Mantua Grove Rd. The site has been vacant since 1999, although a couple of years ago a plan was floated to turn it into an ethanol production plant.
Jones Lang LaSalle

Supply Company Inks 51,000-SF Renewal
By Eric Peterson
Last updated: November 29, 2005 09:45am

(To read more on the industrial market,
click here.)
BRIDGEWATER, NJ-South Central Pool Supply Inc. has renewed its lease for 51,360 sf at MiddleBrook Crossroads, an industrial park owned by the Bedminster, NJ-based Advance Realty Group. The tenant, an operating division of the Covington, LA-based SCP Pool Corp., a wholesale distributor of swimming pool supplies and related equipment, uses the space as a service center.


Advance Realty was represented by Mike McDonough of the Garibaldi Group/Corfac International, Chatham, NJ. The tenant was represented by Mindy Lissner of CB Richard Ellis, East Brunswick, NJ. The terms of the transaction were not released.
MiddleBrook Crossroads, said to be one of the oldest parks of its kind in the country, is an 800,000-sf office/flex/warehouse at the crossroad of Route 22, 28 and I-287 in Somerset County. Its major tenants include the United Parcel Service, DiFeo Lexus and the Borough of Bound Brook.

Tuesday, November 29, 2005


Jones Lang LaSalle
NYC 11 28 05
URBAN GLASS HOUSE: HALF FULL?
Anna Holtzman


The Urban Glass House, designed by Philip Johnson Alan Ritchie Architects, is a condo project rising in a 19th century Manhattan industrial district.









Philip Johnson is gone, but not forgotten. A slick sales campaign by real estate marketing firm The Sunshine Group tells us that the Urban Glass House, a vestige of the final projects designed by the late, renowned architect, is rising as we speak in a fast-changing urban industrial outpost at the western edge of SoHo and just north of Tribeca.

The neat marketing package belies a convoluted backstory: First, this isn’t the building Johnson intended as his last legacy (in fact, it is more of a tribute design than one of his own.) Second, the man who dreamed up the project and hired Johnson’s firm-restaurateur-turned-developer Nino Vendome, who after 9/11 turned his nearby restaurant into a home-away-from-home for thousands of rescue and recovery workers at Ground Zero-has all but vanished from the project as well.


The Glass House replaces the more exciting Habitable Sculpture, which the community and city planners rejected a few years ago.















Interwoven into the mixed-up tale of Johnson’s legacy is the story of this morphing neighborhood. Vendome’s initial vision opened the doors for a suite of high rise residential projects that ultimately beat him at his own race to set the tone for the neighborhood’s future, and actually set the stage for the rezoning three years ago of the 19th-century industrial district for residential use.

It all began in 1999, when Vendome selected Philip Johnson Alan Ritchie Architects’ envelope-pushing design for a residential tower at Spring and Washington Streets, a site that Vendome had pieced together parcel by parcel over several years. At 26 stories, the project, known then as the Habitable Sculpture, defiantly broke all of the neighborhood’s rules: Not only did it challenge the industrial zoning and the aesthetic of its historic surroundings-the scheme resembled a fistful of towers spliced together, with different facades sticking out at various angles-but, reports Community Board 2 zoning committee chair David Reck, the building’s floor area ratio (FAR) of 17.4 was way above the zoning allowance of 5.

“Everyone loved the building,” Ritchie told The Slatin Report. “We got glowing reports from [then-New York Times architecture critic Herbert] Muschamp and the architectural community.” But Reck and the community board couldn't see past the current zoning, though he concurred that, “The design was really something to look at.” It's axiomatic that community boards dread change, and this one fit the mold. The board feared that making an allowance for Johnson's scheme would open the floodgates for other high rise developments.




The project replace the warehouse next to the historic James Brown House, home of the Ear Inn.

www.nyc-architecture.com







They were right: Around the time that Vendome’s proposal was turned down by the city's Board of Standards and Appeals in early 2003, the city had rezoned the neighborhood, and a fleet of new residential developments followed-including Metropolitan Housing Partners’ 505 Greenwich Street, designed by architect Gary Handel and Associates, and developer Jonathon Carroll’s Greenwich Street Project, whose undulating curtain wall is the work of architect Winka Dubbeldam.

Undeterred, Vendome asked Johnson and Ritchie to go back to the drawing board and come up with a design that fit the new 6.02 FAR requirement. Instead of stunting the original opus, Ritchie proposed an entirely new concept-a tribute to Johnson's 1949 Glass House in New Canaan, Conn., one of Johnson's most celebrated works. The resulting “Urban Glass House” is the comparatively squat curtain wall structure now rising at 330 Spring Street.

Although he professes pride in the new design, Ritchie confessed to The Slatin Report, “I feel upset, because we were the trailblazers for how this neighborhood could be developed, and our design offered a contextual feeling for the area, using brick and other historical elements.” Instead, he said, the tone has been set by projects that paid little attention to context.

For Vendome, though, it was too little, too late. In 2004, says Ritchie, after the Urban Glass House had been approved by the Dept. of City Planning and local community groups, Vendome still yearned to build the original Habitable Sculpture, on another site. He sold the Spring Street site with the Johnson Ritchie design to Glass House Development, LLC, a consortium of developers, comprised of Charles Blaichman, Scott Sabbagh, and Abraham Schnay. They hired architect Annabelle Selldorf to design the interiors for the residential units.





The unbuilt Habitable Sculpture paved the way for developer Jonathon Carroll's Greenwich Street Project, designed by Winka Dubbeldam, around the corner.








Despite persisting resistance from the community, the building’s superstructure is already up, with the first unit slated for completion in June 2006. And further development in the area is inevitable-according to Schnay, there are three other nearby projects in the works. “Give it five more years,” says Reck, “and it’ll be a completely different area.”

Had they known that change was coming, some locals may have preferred the Habitable Sculpture to its replacement. “The current design is a compromise," Rip Hayman, who since 1979 has owned the James Brown House, an early 19th century landmark adjacent to the Glass House site and the home of a famed local tavern, the Ear Inn, told The Slatin Report. "I thought [the original design] was fantastic.” Hayman asserted that he and other longtime residents of the area have always wanted the neighborhood to become residential; he believes that the rezoning will bring benefits such as residential services to the area. “The problem,” he says, “is that it’s become [one of] the most expensive neighborhood in the city, and that’s squeezing out older renters.”

And in this neighborhood, it doesn’t look like the real estate bubble’s about to burst anytime soon. According to Schnay, 25 percent of the Urban Glass House units-priced from $1,140/square foot to $2,325/square foot-have already sold. And he reports that the majority of those interested in the 4,300-square-foot penthouse want to combine it with additional units below. Cindy Saxman, a mortgage broker with Guilford Funding, said of the area in general, “People are buying-I don’t think you’ve seen the end of the boom yet.”

Nino Vendome still hopes to erect his Habitable Sculpture on another site at some point in the future, but he hasn't given up entirely on this site's potential: Vendome retains the ground floor commercial space at the Urban Glass House, where he has asked Ritchie to design an Italian restaurant for him. Said Hayman, “It’s getting to be like Garlic Row here with all the restaurants-the more restaurants you have, the better.” He added wistfully, “Vendome was the one with the vision, but not the real estate experience.”
Jones Lang LaSalle

Fidelco Plans $20M Upgrade for 1 Washington Park
By Sean Ryan
Last updated: November 28, 2005 01:49pm

Sean Ryan is associate editor of Real Estate New Jersey.

NEWARK-Fidelco is planning a $20-million upgrade of 1 Washington Park here in the CBD of the state’s largest city. Approximately $3 million of the total will go toward a new two-story lobby.

The 405,000-sf, 17-story office building will be upgraded to class A space with new elevators and bathrooms, fiber-optic wiring, energy-efficient HVAC and new security systems. New tenant amenities will include a fitness center, conference facility and ground-floor retail. The site was originally constructed in 1983.

“When the renovations at 1 Washington Park are complete, Newark will have the equivalent of a brand new office tower to feature as part of the Quad’s transformation,” says Marc E. Berson, chairman of Fidelco Realty Group. The North Broad Street Quad is featuring its own makeover, with the star attraction being the $225-million light rail construction. Both the Newark Broad Street station and Bears and Eagles Riverfront Stadium, also face the North Broad Street Quad.
Newmark is the exclusive leasing agent for 1 Washington Park. Tenants include Gann Law Books, which inked a 10-year commitment, Conti Enterprises, Makro Technologies and North Star Academy Charter Schools.
Jones Lang LaSalle

Merck to cut 7,000 jobs, close or sell five plants
11/28/2005, 1:06 p.m. ET
By LINDA A. JOHNSON The Associated Press

TRENTON, N.J. (AP) — Embattled drugmaker Merck & Co. said Monday it will cut 7,000 jobs — 11 percent of its work force — and close or sell five manufacturing plants in the first phase of a reorganization meant to save up to $4 billion by the end of the decade. Its shares dropped more than 4 percent in afternoon trading.

The announcement, anticipated by Wall Street, comes as Merck faces the loss of patent protection in June for its blockbuster cholesterol drug Zocor and thousands of lawsuits and billions of dollars in potential liability from its recalled painkiller Vioxx.

Zocor now generates about 20 percent of Merck revenues and is the world's second-biggest drug. Because of the coming competition from generic drug makers, Merck expects Zocor sales to drop to $2.3 billion to $2.6 billion in 2006 from $4.2 billion to $4.5 billion this year.

Whitehouse Station, N.J.-based Merck also said it will revamp its supply chain and outsource some manufacturing as part of the reorganization, which should bring about half the anticipated savings.

Merck said the cuts, which are expected to be completed by the end of 2008, are intended to reduce the company's cost structure, increase efficiency and enhance competitiveness. Merck has slipped from the world's third biggest pharmaceutical company to No. 5 in recent years.
"The actions we are announcing today are an important first step in positioning Merck to meet the challenges the company faces now and in the future," said Richard T. Clark, Merck's chief executive officer and president, told analysts during a morning conference call. "We believe they will improve our earnings-per-share and ultimately enhance our shareholder value."
The company said half of the planned job cuts — in manufacturing and other divisions — will target its U.S. operations. The company employs just under 63,000 people, half of them in the United States. Last month, Merck cut 825 jobs worldwide.

Merck did not identify where the five manufacturing plants to be closed or sold are located. It has 31 manufacturing plants overall. It also plans to reduce operations at a number of other sites and will close one basic research site and two preclinical development sites. Those sites were also not identified.

"Employees at the sites that are expected to leave our networks are being advised at a series of local meetings over the next two days," and the sites will not be named until after that, said Willie A. Deese, head of Merck manufacturing.

Merck shares fell $1.26 to $29.72 in afternoon trading on the New York Stock Exchange. Its stock price has lost more than two-thirds of its value in five years.

The cuts were "pretty much anticipated," said health care analyst Hemant Shah of HKS & Co. in Warren, N.J. "It appears there's enough savings to offset at least some of the decline in Zocor."
But Shah said it's hard to tell if the reductions are the right size, because Merck still has to market existing drugs and new medications in what he called a "lackluster" pipeline. Medications in their final stages of development include drugs for insomnia, diabetes and nausea caused by chemotherapy, and vaccines for rotavirus, shingles and cervical cancer.
Clark, the former head of Merck manufacturing operations who took over as CEO last spring, said the company is looking for ways to "enhance efficiencies" and "improve the way we discover, develop, manufacture and market our medicines and vaccines and ensure that we get them to patients who need them as quickly, safely and efficiently as possible."
He said Merck also plans to "pursue improved approaches to R&D, and marketing and sales."
Restructuring costs from the moves announced Monday are expected to be from $350 million to $400 million in 2005 and $800 million to $1 billion in 2006. They are expected to result in cumulative pretax savings of $3.5 billion to $4 billion from 2006 through 2010.
The company said it will provide further details on Dec. 15, when it holds its annual business meeting for analysts.

Merck reiterated its 2005 earnings-per-share forecast of $2.47 to $2.51, or $2.04 to $2.10 with one-time charges. For 2006, the company forecast earnings per share of $2.28 to $2.36 excluding restructuring charges, or $1.98 to $2.12 with one-time charges.
Analysts surveyed by Thomson Financial expect earnings per share of $2.50 in 2005 and $2.38 in 2006.

Meanwhile, the first federal Vioxx liability trial is set to start in Houston on Tuesday. Merck has won once and lost once in state trials in New Jersey and Texas, and analysts have pegged its total liability at up to $50 billion.

Merck's forecast does not include any Vioxx-related costs, and Merck said Monday it has not set up a reserve for Vioxx liability — wisely, according to Shah.
"The minute you say that, then you're telling the whole world what you're willing to pay," the analyst said.
Jones Lang LaSalle

NJMC to study tainted Koppers Koke site
Monday, November 28, 2005
By JENNIFER MOSSCROP
JOURNAL STAFF WRITER

One of the largest brownfield sites in the area may be the key to creating thousands of jobs in Kearny.

The New Jersey Meadowlands Commission has approved a plan to conduct a formal study on the contaminated, 100-acre Koppers Koke site in Kearny.

NJMC staff will investigate the former industrial site which borders the Hackensack River, Route 7, and the NJ Turnpike, to see if it meets the criteria for redevelopment.

If it qualifies and is approved, NJMC planners and engineers will develop new zoning regulations and site plans in order to attract developers for logistical operations such as warehousing, light manufacturing, or importing and exporting goods, according to NJMC spokesperson Chris Gale.
The report is expected back from the planners in February.

According to Kearny Mayor Albert Santos, Koppers Koke is owned by the state, the Hudson County Improvement Authority, and the NJMC, making it a very complex site in regard to who funds what.

There are infrastructure, access, sewage and environmental issues that will cost millions to resolve, Santos said.

"We partnered with NJMC to find good use for the land," said Hudson County Executive Tom DeGise, who stressed the importance of the study. "Now we're headed in the right direction."
Funding for the study will come from the NJMC's operating budget, according to Gale.
"After the site is clear of contamination, the area should be kept in the public eye so no one could pollute it again," said Hackensack Riverkeeper Captain Bill Sheehan, who was part of the vision committee formed by the NJMC earlier this year.
Jones Lang LaSalle

UMDNJ Plans $130M Med School Project
By
Eric Peterson
Last updated: November 28, 2005 08:40am

CAMDEN, NJ-It’s still in the early discussion stages, but a plan is in the works for a new $130-million medical school located adjacent to Cooper University Hospital here. The board of trustees of the University of Medicine and Dentistry of New Jersey has started talking about the feasibility of such a project, according to officials of the university. One of the talking points is whether outside funding can be arranged to do the project, because it’s not currently in the institution’s budget, according to a spokesman for UMDNJ.

If it comes to fruition, it would be the fourth component of the UMDNJ, which is the country’s largest public university of its kind. Its existing schools include the New Jersey Medical School in Newark, the Robert Wood Johnson Medical School in New Brunswick and the School of Osteopathic Medicine in Stratford.

The local project, according to the spokesman, is also being viewed as a major component in this city’s ongoing revitalization. And an internal feasibility report made public by Cooper University Hospital offered the conclusion that a med school project is key to its future growth and ability to compete. Cooper, which came close to bankruptcy several years ago, has since rebounded and is currently expanding.