In Letter to Governor, Alcatel-Lucent Seeks to "Set the Record Straight"

The following is a letter written by Patrick D. Morrison, the Vice President of Real Estate for Alcatel-Lucent, to Gov. Chris Christie. It is dated June 22, 2011 and was shared with Holmdel Patch on June 23.  In refers to a letter Cote sent to Christie last week. 

Dear Governor Christie:

            On behalf of Alcatel-Lucent USA, Inc. I am writing to you to set the record straight on the proposed Monmouth County wastewater management plan (WMP) for Holmdel Township that was prepared by the New Jersey Department of Environmental Protection. 

            The proposed WMP, which was the subject of a public hearing earlier this month, affects the two properties owned and operated by Alcatel-Lucent that were the site of Bell Labs research facilities.  The WMP continues to include all of both properties in the public sewer service area of the Bayshore Regional Sewerage Authority (BRSA), as they have been since 1992.  Opponents of this WMP, including a former mayor of Holmdel, seek to have most of the area of these properties removed from the sewer service area, leaving only the isolated footprints of the existing buildings with access to sewer service.    

            In expressing their views, opponents of the NJDEP proposed plan have made statements that are intemperate and inaccurate.  Alcatel-Lucent wants to present you with the facts.

            First, NJDEP’s proposed plan simply maintains the current status of nearly two decades standing of including the entirety of both these properties in the BRSA sewer service area.  These properties were first connected to the public sanitary sewer system in 1992 in accordance with a wastewater management plan amendment prepared by Holmdel Township and approved by the NJDEP.  The 1992 wastewater management plan -- submitted and approved by Holmdel Township while Ernest  Cote was mayor -- expressly added all of  “the approximately 480 acres of the AT&T Bell Labs facility to the area currently designated as sewered and to be sewered.”

            Regrettably, over the past decade, Holmdel Township has repeatedly sought to rewrite this history.  In spite of the plan’s clear language, which is cited above, some township officials have tried to assert that the 1992 WMP included only the actual Bell Labs structures

The NJDEP has considered and rejected this contention at least twice.  In 2002, NJDEP declared, “After an extensive review of all available information, . . . the sewer service area should include the entire property as depicted in the map of the adopted wastewater management plan amendment of August 19, 1992.”

             Second, including the entirety of the two properties in the BRSA sewer service area was part of a mutually beneficial understanding among Holmdel Township, the BRSA, and Alcatel-Lucent’s predecessor, AT&T Corporation.  Mr. Cote contends in his letter to you that there was no such understanding, but documents from that time make it clear this was an arrangement devised to benefit all. 

            AT&T certainly did see value in connecting its property to the sewer system instead of relying on on-site treatment facilities.  In partial consideration for this enhancement, AT&T agreed -- at the urging of Holmdel Township -- to construct additional and expanded off-site sewer facilities that would serve Holmdel Township’s public buildings (including the town hall, police and fire departments, and public works department), Holmdel school district facilities (including the intermediate school and high school), the U.S. Post Office, the State Police barracks, the NJ Highway Authority’s maintenance facility and Arts Center (now the PNC Arts Center), the Vietnam Veterans Memorial Visitor Center, and to extend lines to serve up to 45 existing and future single family homes. 

             Alcatel-Lucent never contended it provided sewer facilities for municipal buildings that had not had sewer access before.  What Alcatel-Lucent did state at the recent public hearing is that “AT&T constructed additional and expanded facilities” for the Township’s benefit.

             A 1992 memorandum by Holmdel Township’s engineer -- who serves to this day -- proudly advised Township officials that these additional off-site facilities, which he insisted AT&T provide, would save the Township between $600,000 and $750,000 or more (in 1992 dollars), and spare the Township and its residents the inconvenience of separate construction projects. 

            This included paying for a new pump station the engineer noted the Township otherwise would have had to pay to replace, at a cost of $600,000 to $700,000.  This also included extending its line to serve a neighborhood not previously connected to the sewer system, a step that  the engineer estimated would save the Township up to $100,000 in future expenditures to provide service.  AT&T built these facilities and transferred them to Holmdel Township for a token payment ($100).

             Removing substantial portions of the Bell Labs properties from the BRSA sewer service area, as urged by Holmdel Township, would give Holmdel Township all its benefits, while stripping Alcatel-Lucent of its end of the bargain.  Simple equity cries out against this position.

Moreover, AT&T’s assumption of the Township’s costs clearly “subsidized” the Township, saving it money it otherwise would have had to expend.

            Likewise, the engineer noted that AT&T agreed to pay a one-time connection fee and ongoing sewer costs on the basis of 480 residential equivalents, i.e. the use of 480 acres.  This confirms that the entirety of the properties should be within the sewer service area, and to the extent AT&T actually developed far less of its land, represented an additional subsidy in terms of the one-time connection fee as well as on a recurring basis each quarter.  Mr. Cote notes this is not a subsidy, but the measure by which all property owners are assessed for sewer costs.  Given that, then like every other property owner in Holmdel, Alcatel-Lucent should remain free to develop and sewer any portion of the property it owns, within the bounds of zoning and environmental regulations.

            Third, the NJDEP proposed plan does not involve “over development” of the Bell Labs properties in Holmdel.  These properties are not undeveloped land.  For example, the existing development on the Holmdel Bell Labs property consists of a six-story main building and outbuildings including a gross floor area of approximately 1.9 million square feet.   It also includes approximately 4,800 parking spaces.  At its peak, approximately 6,500 persons were employed on site, virtually all of whom traveled to and from the site by private automobile.  Although the site is currently configured with a single large central structure, and numerous small outbuildings, current zoning permits development anywhere on the site, in any configuration—a total of 2,059,038 gross square feet of office and laboratory space.

            These properties were an economic powerhouse for the region and for the New Jersey as a whole for decades.  The 6,500 primary jobs created many thousands of secondary jobs throughout the region.  In addition to the millions of dollars in property taxes paid annually by the Alcatel-Lucent to Holmdel Township, to the Holmdel school district, and to Monmouth County, its employees paid many millions more each year in income and sales taxes.

            As currently configured, these properties are housing a small fraction of the 6,500 jobs they provided in the past.  Once redeveloped, however, they could represent a significant resource for resurrecting the State’s economy.  Redevelopment of these properties, however, involves reconfiguring them with at least some structures to serve new uses.  Retaining the entirety of these properties in the sewer service area is essential to provide the flexibility to attract and accommodate appropriate new users.  This is a matter of reasonable and sound land use planning, and the best way to get the properties back into productive use generating jobs for Holmdel residents and taxes for the Township and its schools.

             Simply put, permitting the same level of economic activity that existed for decades and at the intensity of physical development historically permitted by local zoning -- however configured -- is not “overdevelopment,” especially where the size and scope of any re-development is limited by existing zoning limitations and wetlands restrictions.

            Ultimately however, as important as these policy considerations may be, the decision to retain the Bell Labs properties in the BRSA sewer service is governed by well-established legal standards.  Alcatel-Lucent has submitted oral and written comments to the NJDEP on the proposed plan that set forth the legal and factual reasons that justify, indeed require, that the entirety of the properties be included in the BRSA sewer service area under existing legal standards.

            Finally, Alcatel-Lucent and its employees have always valued their distinguished history as good citizens of the State of New Jersey providing high-quality jobs and developing cutting-edge technology.  In managing its properties in Holmdel, we have taken great pains to foster the sort of redevelopment that will enhance Holmdel Township and of which its residents will be proud.

            Alcatel-Lucent supports the recent progress among the stakeholders to collaborate on redevelopment of the sites, and we encourage all concerned to focus on the merits of those issues rather than counterproductive name-calling. 

            We would, of course, be happy to provide you with additional information and documents on any of these points.  Please feel free to have your staff contact me. 

Sincerely yours,

Patrick D. Morrison

Vice President - Real Estate