Published in The Record, Oct. 25, 2022

“We have got to keep going.”

On a campus marred by decades of scandal and failure, a COVID megalab rises in record time.

The national emergency struck on a perfect day. It was 75 degrees and sunny, and the cherry blossoms were in bloom on March 13, 2020, when Steve Rusckowski, CEO of Quest Diagnostics, walked to the podium in the White House Rose Garden. Framed between President Donald Trump and Vice President Mike Pence, Rusckowski appeared relaxed and confident.

The president had just declared a national emergency for COVID-19. So Rusckowski kept his remarks short. Quest and its competitors had been working with Pence for a week, he said, trying to ramp up COVID testing. Quest already was running tests, he said, and “the capacity available to the American public to support this action with consumers will be considerably increased in the next few weeks.”

Rusckowski’s sunny demeanor masked a secret: For Quest Diagnostics, the pandemic could not have arrived at a more challenging place and time.

The company’s primary laboratory for the New York region was in a former swamp, across the street from Teterboro airport, 8 miles from Manhattan. Built in 1978, the buildings were decrepit, and the campus was prone to flooding during rainstorms. Quest had planned since 2015 to replace the old facility with a modern mega-lab in Clifton. When complete, the new laboratory would have 175,000 square feet of testing space. Staffed by 1,000 people, equipped with the latest diagnostics equipment, and run by some of the largest automation machines ever made, the laboratory would be one of the most efficient facilities of its kind in the world. It would serve 40 million people a year across seven states.

But as Rusckowski stood beside the president, he knew: His new lab was only 80% built. Even after construction was complete, Quest couldn’t begin large-scale COVID tests until technicians installed the facility’s automated assembly lines.

Those lines — and the workers needed to install them — were in Italy. This was a problem. Because Trump’s national emergency had just banned travel from most European countries, including Italy.

Without quick action, COVID testing and contact tracing across the entire Northeast could grind to a standstill.

“We were just getting ready to move equipment in when that first spike hit,” said Bob Roggeman, who led Quest’s effort to build the Clifton mega-lab. “We were in the middle of it. We were being hammered here.”

Less than a year later, Quest’s new laboratory opened. That speedy turnaround time is impressive for any project of this size and complexity.

It’s especially impressive because of where the lab sits.

The enormous building occupies just a corner of a much larger campus. Known as “On3,” it’s the site of one of the largest and most economically important development projects in New Jersey. On this land, corporate dynasties traditionally waxed and waned over the course of decades, not months.

More recently, financial crises — plus an unusually personal fight between developers and local officials — have stalled development for years.

A long rise …

Around the turn of the last century, the land where Quest’s new lab sits was a wooded valley. Trains pulled uphill from Newark to Paterson along a branch of the Erie Railroad; when the coal-fired locomotives passed, the narrow valley filled with the noise of water falling down little St. Paul’s Brook.

Sixteen miles away, in lower Manhattan, Elmer H. Bobst needed to make a move. Bobst was director of American operations for Hoffmann-La Roche Chemical Works, a Swiss maker of popular drugs and vitamins. As sales grew, Bobst’s headquarters at 19 Cliff St. were growing cramped.

Bobst and his team found the spot along St. Paul’s Brook in Nutley, New Jersey. The site was large and cheap. It offered a train line with fast access to the Hudson River and New York City. Hoffmann-La Roche bought 23 acres.

Immediately, Bobst indicated he planned to stay a while. The original campus included a power plant, a factory, a warehouse and a headquarters building complete with terrazzo marble floors. Nearly 50 people attended the groundbreaking ceremony in 1928. The women wore fur stoles.  

Over the next seven decades, Hoffmann-La Roche developed more than 40 buildings across 119 acres, and its campus sprawled into neighboring Clifton.

Roche was successful because its products helped modernize American medicine. Researchers in Nutley developed affordable treatments for leprosy and tuberculosis. Later innovations included drugs for Parkinson’s disease, cancer and AIDS.

But the event that changed Roche and Nutley forever was the Great Tranquilizer War.

In 1954, Wallace Laboratories introduced a popular anti-anxiety drug called Miltown. Roche responded with Librium, Diazepam and Valium, all marketed as mild tranquilizers that soothed anxiety without causing addiction. 

Valium became the most popular prescription drug in the world. Doctors wrote 45 million Valium prescriptions in 1978 alone. By then, Valium represented 40% of Hoffmann-La Roche’s $1.4 billion in annual revenues from drug sales.

Thanks in part to Valium, Hoffmann-La Roche became one of the corporate giants that defined postwar America. In the 1960s, the company built a 15-story office tower of glass and marble in the chic International Style. It became a landmark for drivers in North Jersey. The company owned a golf course, and its own trap-shooting club.

“They’ve got a little city in there,” Clifton Mayor Gerald Zecker told The Record in 1980. “They’ve got their own fire department and medical services.”

Workers, their families and many residents of Clifton and Nutley grew to trust Hoffmann-La Roche as a benevolent corporate citizen. When Fred Hemsley hired on as a chemist in 1957, the paternal relationship between the pharmaceutical giant and the people of New Jersey was firmly rooted.

“They told me, ‘Fred, you’re part of the Roche family now,’” Hemsley told a newspaper reporter.  

Deep into the 20th century, that relationship appeared intact. In 1990, Hoffmann-La Roche announced plans to spend $100 million on a huge new research laboratory. Again, it seemed the company’s leaders planned to stay a while.

“The life expectancy of a lab is about 20 years,” Roche spokesman Alfred Wasilewski said at the time.

… And a long fall

Even as the company continued to post record annual profits, there were indications the Nutley campus was in trouble. A federal investigation into Valium addiction began in 1967, leading to a Drug Enforcement Administration proposal in 1975 to limit prescriptions. That, plus news that Elvis Presley died in 1977 with high levels of Valium in his body, and Betty Ford’s admission in 1978 that she had been addicted to alcohol and Valium, led to a national scandal that hurt Roche’s sales.

By July 1980, Roche's usually reticent CEO, Irwin Lerner, granted a rare interview to The Record to sound the alarm.

“It’s no secret,” Lerner said. “I’ve told employees we need to be more efficient.”

He also warned that unless Roche’s workers in Nutley found new products to win FDA approval and replace drugs like Librium, which recently had lost patent protection, the company might exit the drug business altogether.

“Corporations can always find another way to invest their money,” Lerner warned. “If researching and developing new drugs is no longer profitable, we’ll find some other way to be profitable.”

More setbacks followed. In the 1980s, two skin drugs by Roche were found to cause birth defects. Simultaneously, a series of deaths linked to Roche’s powerful sedative Versed led to a congressional investigation, calls to reform the Food and Drug Administration, and revelations that Roche leaders knew the drug was potentially fatal six years before they sold it in the United States.

Meanwhile, Lerner’s plans for new products didn’t pan out. After spending years to develop Interferon, an anti-cancer drug that Roche leaders predicted would become a major moneymaker, the drug performed poorly in early clinical trials. This, plus slower FDA approvals for other products, forced the company to lay off 1,000 employees in 1985, about 15% of its workforce in Nutley.

The cycle repeated. Three years after the FDA forced Roche to remove its heart medication Posicor from pharmacy shelves in 1998 due to serious side effects, the company laid off 900 people at Nutley. Roche spent years developing a cardiovascular drug called Dalcetrapib, which company leaders expected to become a sales blockbuster until it failed a late-stage clinical trial in May 2012.

One month later, Roche announced that the Nutley plant would permanently close. This meant layoffs for the last 1,000 full-time employees at the campus, plus another 1,000 temporary workers. Roche leaders moved their headquarters to San Francisco.

The company’s American research operations returned to New York City, 40 blocks north of the original Hoffman-La Roche laboratory in lower Manhattan. The moves came as Roche diversified, investing $47 billion to purchase the biotechnology firm Genentech, and reducing its reliance on the increasingly costly and high-risk game of seeking FDA approval for new drugs.

Thirty-two years later, Irwin Lerner’s prediction had come true. And still the news came as a shock to some employees.

“We just found out an hour ago, so we can’t really say much,” one Roche worker told The Record the day of the layoffs. “What job is safe now?”

A renaissance delayed

The roadblock sign was big and yellow. It looked official. And it certainly wasn’t subtle.

“THERE WILL NOT BE ANY ACCESS TO ROUTE 3 EAST,” read the sign, created by the township of Nutley, and posted at the southern entrance to the former Roche campus in early 2020.

The sign contained a few factual errors. As a county judge later ruled, it was illegal. No municipality has the power to unilaterally restrict traffic between two towns. Also, it never worked. Motorists, mostly from Nutley, ignored the sign, and continued using the campus as a shortcut to the state highway.

But as a symbol that rebuilding the Roche campus may take nearly as long as Roche took to abandon it, the big sign worked perfectly.

“I’ll be honest with you,” Clifton Mayor James Anzaldi said in a phone interview in February. “I don’t understand what’s happening in Nutley at all.”

What’s happening in Nutley begins with basic geography. Hoffmann-La Roche called its New Jersey headquarters the Nutley campus, because the headquarters buildings were in Nutley, which is in Essex County. But a majority of the campus — 56% — lies in Clifton, which is part of Passaic County. The boundary runs in a straight line, south of Route 3 and parallel to the highway.

Like everything else at the site, the current legal battle among Nutley, Clifton and the development company that owns the campus is rooted in decades of history.

As Hoffmann-La Roche grew, it constructed buildings across the entire campus. But as the company moved away from manufacturing into high-tech research, it tore down many of the older factories and warehouses in Clifton, along the northern edge of the 119-acre site, and replaced them with parking lots. This became a problem for Clifton, Anzaldi said, because companies pay property taxes on buildings.

Not on parking lots.

“There was definitely more empty property in Clifton than there was in Nutley,” said Anzaldi.

Clifton found a partial remedy for its lost tax revenues when it approved a strip mall, later named Clifton Commons, nearby. Garry Furnari, Nutley’s mayor at the time, was enraged. The mall would pay its taxes to Clifton but send its traffic onto Nutley’s streets.

Furnari responded in 1997 with a lawsuit, and a threat to blockade nearby roads.

''God forbid if it gets to this, but we will put in one-way streets and we will try block them off," Furnari told The New York Times.

Furnari never actually blocked the roads. But he was right. When the project was built, Clifton got the money. Nutley got the traffic.

Fifteen years later, Roche announced plans to leave. The move cost Clifton $5 million a year in lost tax revenue, and $9 million for Nutley, which represented 10% of the township’s budget.

“I was angry and upset when the news came out,” Nutley Mayor Alphonse Petracco said at the time.

For four years, the site lay quiet. Finally, in 2016, Bloomfield-based Prism Capital Partners bought the property. The day the sale became public, Seton Hall University and Hackensack Meridian Health, New Jersey’s largest hospital chain, announced they would use part of the campus to build a private medical school.

Landing such an important anchor tenant helped Prism lure other desirable corporations. Eventually the developer signed leases with Ralph Lauren; Eisai Inc., a Japanese pharmaceutical company; Modern Meadow, a biotech company that creates bioengineered fabrics; the Center for Discovery and Innovation, the research arm of Hackensack Meridian; and a Marriott hotel.

“Our focus is to make sure we attract the widest array of users that will be here for the long term,” Eugene Diaz, an owner of Prism Capital Partners, told The Record in 2017. 

Initially, officials in Nutley supported the changes.

"This is an exciting day for Nutley," Mayor Joseph Scarpelli said at the medical school’s opening ceremony in June 2018.

The troubles arose as the old Roche buildings in Nutley filled with new tenants, and Prism began to market the mostly vacant land in Clifton.

The first dispute concerned an 80,000-square-foot building for doctors’ offices. At a town meeting in November 2019, Scarpelli said such a large building would inundate Nutley with cars.

“We need a good idea of how the entire site impacts the township,” Scarpelli said. 

Prism already had spent $230 million fixing up the site, Diaz said. He wasn’t happy that instead of a thank-you, Nutley’s leaders responded with obstructionism.

"You could say there is a little friction," he said after the event.

The argument grew.

Quest Diagnostics' facility at the former Roche campus on Route 3 in Nutley and Clifton is seen from the air.COURTESY OF PRISM CAPITAL PARTNERS AND ON3

COVID hit.

Projects bogged down.

First, in July 2020, Seton Hall pulled out of the medical school. The university’s leaders announced they couldn’t afford such an expensive project. Then Nutley leaders tried to chop the campus in half. The township’s leaders sought expensive highway projects to prevent Route 3 traffic from entering their town. The hotel and office projects foundered, due partly to the pandemic, and partly to opposition from Nutley.

Diaz’s response wasn’t exactly diplomatic. He filed a lawsuit. He called the mayor “silly.”

Mauro Tucci, elected mayor of Nutley in 2020, saw Diaz’s bet and raised it: He sued, seeking to condemn portions of the campus and take ownership using the right of eminent domain.

This summer, the logjam eased. In July, Cantor Fitzgerald, the financial services company, paid $121.7 million for the former Hoffman-La Roche office tower. In August, Gov. Phil Murphy attended a ribbon-cutting ceremony for Eisai, which brought 800 pharmaceutical jobs back to the campus. Hotel construction will start this year, Diaz said.

But Scarpelli reiterated his concerns about traffic. And Clifton’s Anzaldi announced his opposition to Diaz’s plan for a neighborhood of stores and apartments.

A giant hides

The biggest exception to all this drama is the massive new Quest Diagnostics lab.

From Quest’s perspective, the On3 site was perfect from the start, Bob Roggeman said.

Unlike the old lab in Teterboro, which was built in a low-lying swamp, the new one sits 100 feet above sea level. So leaders don’t have to worry about flooding every time it rains. Prism kept Roche's old power plant, so Quest has a redundant source of electricity if the regional grid shuts down.

“That’s one of the reasons why we decided to come here,” Roggeman said.

Most important, the On3 site ties nicely into Quest’s logistics network in the Northeast. It sits 12 miles west of New York City, where the concentration of patients needing blood, urine and tissue testing is high enough to keep Quest’s high-throughput lab equipment running efficiently. It’s 8 miles from Teterboro Airport, where additional samples arrive from across the country on Quest Air, the company’s in-house cargo airline.

As the diagnostics industry faces a worker shortage, leaders at Quest hope the lab’s location near New York will help attract young technicians, Roggeman said. The building is infused with natural light, including a massive skylight over the primary lab space.

“In most labs you see a lot of segmentation. Small rooms. Very closed in. Fluorescent lights,” Roggeman said. “When you’ve got access to outside light, when you’ve got the opportunity to go outside and just get away from the stress, you can create a better commitment and focus.”

To build this flagship lab, Quest faced opposition far more powerful than the mayor of Nutley.

It faced a pandemic, a national emergency, and a global ban on travel.

The moment Trump’s event in the Rose Garden ended, the first issue Quest needed to address was its automated factory line. Without workers and equipment from Italy, the line — and most of the laboratory — would remain dormant. Steve Rusckowski’s appearance at the press conference paid dividends. Working with Trump administration officials, Roggeman said, Quest executives convinced leaders of the Transportation Security Administration and the Department of Homeland Security that Italian technicians needed clearance to travel to the United States immediately.

“We did something at the White House, and we worked with Mike Pence and the COVID team to get everything arranged so that we could keep going,” Roggeman said. “We started bringing in this equipment in July 2020.”

As states declared their own emergencies, domestic workers who were needed to finish the lab received orders to stay home. Quest prepared letters for construction and manufacturing companies across the country to present to their state legislators, explaining the dire need to get the Clifton lab finished, Roggeman said.

Quest’s mega-lab had become perhaps the most important construction project in the country.

“We had to work with everybody and their grandma to help them understand: We have got to keep going,” Roggeman said.

It worked. Eleven months after the Rose Garden event, in February 2021, Quest started moving employees from older labs in Teterboro, Baltimore and Philadelphia into the On3 site. Quest reconfigured the building as it was being built, Roggeman said, deleting lab space for manual tests to make way for the big automated machines that perform genetic COVID testing.

“COVID didn’t exist when we designed the lab,” Roggeman said during a tour of the facility in October 2021. “So this space had to be completely transformed.”

And rather than ignore its neighbors, Quest listened to nearby residents, and radically altered its plans.  

Originally, the lab’s loading dock was to face south. All samples would travel in the same direction, Roggeman said, from south to north through the building as they were accessioned, loaded into the automation line and tested. Most everyone in Nutley in Clifton would have been completely unaffected by this.

Everyone except about six families, who live on streets that dead-end at the Quest Diagnostics property line. For these neighbors, the original design would have sent 350 cars and vans past their windows every night, Roggeman said, as courier drivers deliver samples from all over the Northeast. The headlights, running engines and voices of night shift workers would have made sleep difficult for neighbors.

So Quest took the plan for its massive building and spun it 180 degrees.

“Seeing how close the neighbors were,” Roggeman said, “we actually flipped the design over.”

By moving the loading dock to the north side of the building, Quest assured that the lights and fumes stay hidden between the laboratory and the company’s new four-story parking garage.

“Look out the window and what do you see?” Roggeman said of the nearby residents. “They’re so close, you can actually stand in the lab and wave out the windows at the neighbors.”

The big new lab tucks tightly into the old narrow valley of St. Paul’s Brook, concealing it from three directions. To the north, drivers on Route 3 can barely glimpse the lab’s huge glass atrium behind a scrim of evergreens and the lab’s own parking garage. Touring the laboratory today, it’s hard to imagine any 250,000-square-foot structure that’s better hidden from its surroundings.

No company will ever dominate the land and culture of Nutley and Clifton the way Hoffmann-La Roche did for most of the 20th century. But like its predecessor, Quest Diagnostics seems prepared to stay a while.

“We try to be very good to our neighbors,” Roggeman said. “It’s designed to be here for the next 40 years.”