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Verizon Near Deal to Buy N.J. Site

Posted on: Tuesday, 22 March 2005, 21:00 CST

Mar. 23--Verizon is close to signing a deal to buy AT&T's former corporate headquarters, where it would establish an operations headquarters and move about 1,700 high paying jobs to New Jersey.

The empty AT&T complex in Basking Ridge is owned by Pfizer, the pharmaceutical giant that bought Pharmacia in 2002 shortly after that company spent $260 million to buy the AT&T site.

The reported $125 million deal would mean a victory for state officials who have been working hard to lure New York-based Verizon.

Last month, the state unveiled a $63.8 million tax incentive plan aimed at the phone company, which had also considered Virginia for its operations headquarters.

"Governor Codey has worked on this personally and is confident we'll be successful," state Treasurer John McCormac said Tuesday. He called it a "classic example" of both protecting existing jobs and attracting new jobs that could have gone to another state.

To qualify for the tax breaks, Verizon agreed to relocate 1,755 high-paying executive-level jobs to the state. The grant paperwork indicated the company plans to spend $180 million on an operational headquarters, a figure that includes both the purchase price and any additional building or renovations.

State officials also have offered the company an incentive package aimed at retaining New Jersey-based employees working at Verizon's wireless subsidiary. Verizon Wireless, a joint venture with British-based Vodafone, is based in Bedminster, just a few miles down the road from the 1.3 million-square-foot former AT&T complex.

The new operations center would include workers from New York and other states.

The deal to buy the complex was first reported Tuesday in The Star-Ledger of Newark. The newspaper quoted sources saying a contract would be signed Tuesday morning.

Verizon spokesman Peter Thonis said Tuesday that no deal had been finalized. "There is no signed agreement," he said.

Sources familiar with the deal expect a final contract to be signed within days.

AT&T, which agreed to be purchased earlier this year by one of the Baby Bells, SBC Communications, left its Basking Ridge building, nicknamed The Pagoda, in 2002 and moved its headquarters to Bedminster, where it had a large network operations center.

A move into AT&T's former headquarters by Verizon, a Baby Bell, would mark a symbolic victory for the company, which has fared batter than its parent.

In 1984, AT&T split up as a result of a court order, creating seven Baby Bells including Bell Atlantic, which merged with Nynex and later GTE to form Verizon.

Verizon and AT&T were locked in regulatory and court battles for years over issues related to residential local service, with Verizon fighting to protect its market and AT&T trying to break into the market. Last year, a much diminished AT&T bowed out of the local residential phone market, citing regulatory changes.

In January, Verizon said it would move its corporate headquarters from Sixth Avenue in Manhattan to a new location on West Street in Lower Manhattan. This month it sold its Sixth Avenue headquarters for a reported $500 million.

Verizon, the nation's largest local phone company, announced plans earlier this month to hire hundreds as it builds a new fiber network in 70 New Jersey towns by year end and pushes into the television marketplace to compete with cable companies.

Until recently, however, the company had snubbed New Jersey, placing on hold plans to roll out the high-tech service here and opting to begin deployments in other states. The company was irritated over state regulators' decision to grant it only a 14 percent increase on the wholesale phone rates it charges rivals to lease certain parts of its network. Verizon had asked for a 57 percent rate increase.

The state's change of administration, following Gov. James E. McGreevey's resignation last year, appears to coincide with a softening of relations between the corporation and the state.

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To see more of The Record, or to subscribe to the newspaper, go to http://www.NorthJersey.com.

Copyright (c) 2005, The Record, Hackensack, N.J.

Distributed by Knight Ridder/Tribune Business News.

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VZ, T, SBC,

Source: The Record - Hackensack, New Jersey

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