New Jersey Turnpike officials plan to lease a former office building that was headquarters for Hess. The authority has an option to buy it for $25.9 million.
The landmark Hess building on Route 9 in Woodbridge is getting a new tenant and potential owner, the New Jersey Turnpike Authority.
NJ Turnpike Authority officials signed a 15-year, $2.87 million lease for the 180,000 square foot building with an option to buy the building and 13 acres of property for $25.9 million. The authority could start moving in during the second half of 2016 under the agreement, approved in late September.
"The Hess building is fully furnished and in move-in condition. They've made about $65 million in capital improvements in the building since 2011," said Thomas Feeney, a turnpike authority spokesman. "It allows the Turnpike Authority to have all of its administrative offices under one roof for the first time since the NJTA and the Highway Authority were consolidated 12 years ago."
The New Jersey Turnpike Authority's current administrative offices. (Larry Higgs | NJ Advance Media for NJ.com)The authority currently leases 100,233 square feet of office space on Main Street in Woodbridge. The $2.3 million lease on six floors in that building expires in 2017. Other employees work in the former Highway Authority offices also in Woodbridge.
Consultant Savillis Studley of Iselin recommended the lease-purchase after examining six properties and options to construct a new building, according to authority documents.
"The lease/purchase of the Hess building was the most cost-effective of the many options considered," Feeney said. "It will save about $100 million over 30 years compared to the next most cost-effective option."
The Hess building has been on the market since 2014 after the petroleum company left the retail fuel market, selling its gas stations to Speedway and focusing on the petroleum exploration and production business.
RELATED: Repair to Sandy damaged rail tunnels won't start until 2020.
The Turnpike Authority started house hunting for a new headquarters about the same time in Nov. 2014, seeking a real estate consultant to evaluate options including whether to build a new a new headquarters on three pieces of authority-owned land, including on the PNC Bank Arts Center site in Holmdel.
Savillis Studley was hired in February. Authority officials rejected building a new headquarters as being too expensive. The Hess building met the authority's criteria of consolidating all 450 administrative employees under one roof and being contiguous to the turnpike and Garden State Parkway, which the authority runs.
Larry Higgs may be reached at lhiggs@njadvancemedia.com. Follow him on Twitter @commutinglarry. Find NJ.com on Facebook.
