The state?s largest law firm mulls options that include leaving Newark, its home for more than a centuryFor 140 years McCarter & English, the state?s largest law firm, has been a pillar of downtown Newark. McCarter & English has stayed put while other businesses have fled the city and McCarter Highway, a main downtown thoroughfare, is named for a son of the firm?s founder.
But today McCarter & English is quietly planning to shift its headquarters to bigger and newer offices when its current lease expires in 2008?which could mean relocating in Newark or moving to another city. This has triggered a frenzy among the clutch of real estate developers that are pitching sites and a virtually cloak-and-dagger secrecy about some of the properties being offered.
Lois M. Van Deusen, McCarter & English?s managing partner, says the firm is currently keeping all its options open. That includes the possibility of ex-panding at its current location in Four Gateway Center, where 250 of its 350 attorneys are located. ?We have to do whatever makes economic sense,? says Van Deusen.
With a slew of Fortune 500 companies on its client roster, McCarter & English currently adds about 15 attorneys a year to service new business. The firm aims to expand from the 195,000 sq. ft. it currently occupies across nine floors at Four Gateway Center to 225,000 sq. ft., plus another 50,000 sq. ft. to accommodate future growth.
Van Deusen is considering at least three options in Newark besides the firm?s existing location, and at least three other sites in the Edison-Metro Park area. A recent internal study of McCarter & English employees found that 60% lived south of Newark, with many in Middlesex, Union, Mercer and Monmouth counties.
Many of the state?s major developers are hotly pursuing the firm. The Gale Co. of Florham Park wants to erect a 10-12 story building plus parking facilities on a site it owns next to Four Gateway Center at the corner of McCarter Highway and Raymond Boulevard. Matrix Development of Cranbury is believed to have pitched a site it owns near Newark?s Pennsylvania Station. A third offer is thought to have come from a joint venture between parking lot owner Edison Properties and Rockefeller Group Development of New York City. The venture?s site is next to the proposed New Jersey Devils hockey arena and could accommodate an office complex of up to 600,000 sq. ft.
At the same time, people familiar with the discussions say SJP Properties of Parsippany, Mack-Cali Realty of Cranford and Atlantic Realty of Woodbridge have all dangled properties in the Edison-Metro Park area of Middlesex County before McCarter & English.
Still in the running is the Olnick Organization of New York City, which owns Four Gateway Center. People familiar with those talks say sticking points include the amount of new space that could be available for expansion.
Besides seeking room to grow, McCarter & English is attracted to the prospect of a new building configured to meet current needs. Four Gateway Center was built in 1988, when most law-firm senior executives had space for a secretary or an assistant next to their offices. These days, an assistant typically works for three or more executives. Moreover, McCarter & English wants a prominent sign on its building, which it can?t have in its current location.
Van Deusen says the availability of reserved parking will be another important factor. The firm currently has only 22 reserved slots out of 332 indoor parking spaces at Four Gateway Center.
If McCarter & English opts for a new building in Newark, it would mark the city?s first major office construction project in more than 13 years. The last to be built was One Newark Center, a 635,000-sq.-ft. complex whose main tenant is Seton Hall Law School.
On the other hand, a McCarter & English defection would be a severe blow to Newark. The firm resisted the post-World War II migration out of the city and remained steadfast after the 1967 riots. Uzal Haggerty McCarter, for whom McCarter Highway is named, was renowned in the 1930s as the ?Big Man? of Newark for his civic and philanthropic ventures.
Aftershocks of a McCarter & English departure would be felt throughout the city?s office markets. ?It would hurt downtown Newark because there are several other large blocks of Class A property that will be coming to market within the next nine to 12 months,? says Bryn Cinque, senior vice president of GVA Williams, a real estate services firm in Parsippany.
At Two Gateway Center, for example, Prudential Insurance is likely to vacate some 90,000 sq. ft. as it downsizes and reorganizes its workforce. Market watchers further note that PSE&G may give up from 80,000 sq. ft. to 100,000 sq. ft. at 80 Park Plaza on Raymond Boulevard as a result of its acquisition by Exelon of Chicago. And in One Gateway Center, some 135,000 sq. ft. of space has remained vacant since the Federal Bureau of Investigation moved out two years ago.
For now, McCarter & English continues to ponder its choices. Van Deusen expects the firm to reach a decision by the end of the summer.
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