Jones Lang LaSalle
Rutgers biz school moving within Newark
Leading donor's building to become its new home
Tuesday, April 25, 2006
BY MATTHEW FUTTERMAN
Star-Ledger Staff
Rutgers University plans to move its Newark business school to a building owned by one of the universitys major boosters, school officials announced yesterday.
Stephen Diner, provost of the universitys Newark campus, said he signed a letter of intent for the business school to pay $31 million for the bottom 11 floors of 1 Washington Park, the former Verizon Communications building across from the citys Broad Street train station.
The building is owned by Fidelco, a real estate and development firm whose chairman is Marc Berson. Fidelco purchased the vacant, 17-story office tower in 2004 for $26.5 million. Berson, who received both his bachelor's and law degrees from Rutgers-Newark, has been one of the school's leading donors in recent years, giving roughly $500,000, according to his own estimate.
Diner said the university has been interested in moving the business school to the Washington Park tower for several years, since before Berson owned the building.
Given the recent scandals at the University of Medicine and Dentistry of New Jersey, Diner said he is especially sensitive to questions about the deal with Berson. He said it is an ideal location for a school that has been looking for a presence on Newark's main thoroughfare and a city trying to raise the university's profile as one of its anchor tenants.
"We were deeply conscious as we went into project and we had strict instructions from our board that whatever we do needs to be completely justifiable," Diner said. "We could not go forward unless the transaction was entirely transparent and at arms length."
During the past decade, Berson helped raise several million for the Rutgers law school on Washington Street, where the Berson Board Room was named in his honor. Until last fall, he was a member of the university's Board of Overseers, which monitors investments of the Rutgers University Foundation, and a member of the Rutgers Business School's Advisory Board, which advises the school's dean on planning and policy.
In an interview yesterday, Berson said he voluntarily stepped down from those boards when talks between Fidelco and the university intensified and a transaction appeared likely.
"I never bought the building to sell," said Berson, whose company is investing $20 million to renovate the building.
"If you look at my portfolio, I usually just sit and hold buildings. But Rutgers is a different story," he said. "I couldn't subject them to taxes and not let them take advantage of borrowing capabilities they have as a university or of the residual gains they will get from owning."
Berson, who also co-owns the Newark Bears minor league baseball team, described the deal as part of a decade-long effort by a group of well-known philanthropists, including Raymond Chambers, to revive Newark's core business district. The group created the not-for-profit New Newark Foundation in 1998, but failed to finalize any major development deals.
Meanwhile, Berson tried to convince university officials to expand their presence in the city as he sought real estate deals for his private company that would take advantage of a light rail system that will connect the city's Broad Street and Penn Stations. Those parallel pursuits are on the verge of coming together.
"We're feeling very positive about the investment working out and setting a stage for bigger things to come on the north end of Broad Street," Berson said.
Diner said the university is pursuing federal tax credits for the deal, which he hopes to finalize this summer.
Under the terms of the agreement, the university will buy the lower two-thirds of the building and commit another $50 million for renovations that will include a pavilion in front of the building and a series of tiered lecture halls. He said the university was shocked to find out from the deal's independent appraiser, Appraisal Consultants of Livingston, that Newark's real estate prices had risen so quickly from 2004 when Berson and Fidelco purchased the building.
"The big issue was the issue of price," Diner said. "But we've had our eye on this one for quite some time. We had done analyses to build a comparable space, and every time the cost comes out less by going in this direction."
Jeff Greenberg, whose company, Heritage Management, owns two office towers on the northern end of Broad Street and bid for the Washington Park tower in 2004, said the purchase price was substantial but not outrageous.
"It passes the giggle test, which is whether I giggle when I hear the number," Greenberg said. "But everybody knew as far back as 2003 Rutgers was interested in the building. The deed went to bid and Marc won the deal."
© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.
Rutgers biz school moving within Newark
Leading donor's building to become its new home
Tuesday, April 25, 2006
BY MATTHEW FUTTERMAN
Star-Ledger Staff
Rutgers University plans to move its Newark business school to a building owned by one of the universitys major boosters, school officials announced yesterday.
Stephen Diner, provost of the universitys Newark campus, said he signed a letter of intent for the business school to pay $31 million for the bottom 11 floors of 1 Washington Park, the former Verizon Communications building across from the citys Broad Street train station.
The building is owned by Fidelco, a real estate and development firm whose chairman is Marc Berson. Fidelco purchased the vacant, 17-story office tower in 2004 for $26.5 million. Berson, who received both his bachelor's and law degrees from Rutgers-Newark, has been one of the school's leading donors in recent years, giving roughly $500,000, according to his own estimate.
Diner said the university has been interested in moving the business school to the Washington Park tower for several years, since before Berson owned the building.
Given the recent scandals at the University of Medicine and Dentistry of New Jersey, Diner said he is especially sensitive to questions about the deal with Berson. He said it is an ideal location for a school that has been looking for a presence on Newark's main thoroughfare and a city trying to raise the university's profile as one of its anchor tenants.
"We were deeply conscious as we went into project and we had strict instructions from our board that whatever we do needs to be completely justifiable," Diner said. "We could not go forward unless the transaction was entirely transparent and at arms length."
During the past decade, Berson helped raise several million for the Rutgers law school on Washington Street, where the Berson Board Room was named in his honor. Until last fall, he was a member of the university's Board of Overseers, which monitors investments of the Rutgers University Foundation, and a member of the Rutgers Business School's Advisory Board, which advises the school's dean on planning and policy.
In an interview yesterday, Berson said he voluntarily stepped down from those boards when talks between Fidelco and the university intensified and a transaction appeared likely.
"I never bought the building to sell," said Berson, whose company is investing $20 million to renovate the building.
"If you look at my portfolio, I usually just sit and hold buildings. But Rutgers is a different story," he said. "I couldn't subject them to taxes and not let them take advantage of borrowing capabilities they have as a university or of the residual gains they will get from owning."
Berson, who also co-owns the Newark Bears minor league baseball team, described the deal as part of a decade-long effort by a group of well-known philanthropists, including Raymond Chambers, to revive Newark's core business district. The group created the not-for-profit New Newark Foundation in 1998, but failed to finalize any major development deals.
Meanwhile, Berson tried to convince university officials to expand their presence in the city as he sought real estate deals for his private company that would take advantage of a light rail system that will connect the city's Broad Street and Penn Stations. Those parallel pursuits are on the verge of coming together.
"We're feeling very positive about the investment working out and setting a stage for bigger things to come on the north end of Broad Street," Berson said.
Diner said the university is pursuing federal tax credits for the deal, which he hopes to finalize this summer.
Under the terms of the agreement, the university will buy the lower two-thirds of the building and commit another $50 million for renovations that will include a pavilion in front of the building and a series of tiered lecture halls. He said the university was shocked to find out from the deal's independent appraiser, Appraisal Consultants of Livingston, that Newark's real estate prices had risen so quickly from 2004 when Berson and Fidelco purchased the building.
"The big issue was the issue of price," Diner said. "But we've had our eye on this one for quite some time. We had done analyses to build a comparable space, and every time the cost comes out less by going in this direction."
Jeff Greenberg, whose company, Heritage Management, owns two office towers on the northern end of Broad Street and bid for the Washington Park tower in 2004, said the purchase price was substantial but not outrageous.
"It passes the giggle test, which is whether I giggle when I hear the number," Greenberg said. "But everybody knew as far back as 2003 Rutgers was interested in the building. The deed went to bid and Marc won the deal."
© 2006 The Star Ledger
© 2006 NJ.com All Rights Reserved.
posted by Jones Lang LaSalle NJ News Blog at 11:21 AM
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