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Novartis AG (NVS) Unloads Former New York Space for $18 Million, Resold for $30 Million



9/15/2017 6:36:23 AM

Novartis Unloads Former New York Space for $18 Million, Resold for $30 Million September 15, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Earlier this month, Novartis (NVS) sold a 162-acre property in Suffern, NY to RS Old Mill LLC. Within days, RS Old Mill sold the site to Suffern Partners for $30 million. Suffern Partners is an affiliate of Bridgewater Capital Partners.


The property has a troubled history. In February, RS Old Mill filed a lawsuit against Novartis, attempting to force the drug company to allow environmental testing on the property or return its $2.5 million deposit. Under the court documents, RS Old Mill was described as “a foreign limited liability company” located in Mahwah, NJ and formed in the state of Delaware. The complaint was filed by Yehuda Salamon, the company’s manager.

RS Old Mill had filed for Chapter 11 bankruptcy protection, which did not keep it from using outside funding to buy the property. It’s unclear what RS Old Mill actually does. It was identified as “a small group of family owned companies.” It reportedly had plans to move its operations from Mahwah to the Suffern site, although it also claimed it might be forced to closer if it couldn’t relocate, which would result in the loss of 80 jobs.

According to the original sale agreement filed on Nov. 28, 2016, there was a due-diligence period that allowed the buyer, in this case RS Old Mill, to perform inspections and “invasive” tests to determine if there were environmental issues.

According to the newspaper Iohud, “When the buyer inspected the premises and reviewed documents, ‘critical’ environmental concerns were revealed warranting investigation, according to the lawsuit. The site once produced tablets, capsules, vials and inhalation products.”

The court documents cite underground petroleum storage tanks, previous petroleum spills, former drum burial and solid waste disposal sites. A stormwater detention pond was listed as having “potential significant contamination” from acetone, and there may have been contamination of other wells, as well as vapors from chlorinated solvents and other materials.

On Dec. 16, 2016, RS Old Mill indicated it requested to access the property in order to perform environmental tests, but for four days Novartis denied the request. The lawsuit cited the refusal “may evidence (Novartis’) intent to hide and shield serious environmental risks.”
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RS Old Mill claimed site remediation could cost more than $1.7 million. They then, on Feb. 17, offered to close the deal without the “invasive” testing, but were rejected. Although Novartis did not comment at the time, it did say the property complied with all state Department of Environmental Conservation regulations.

The property had interest from other buyers, including Merlin Entertainments, which builds Legoland amusement parks, and Intercos, an Italian cosmetics company. Both companies later declined to acquire the property.

The lawsuits were dropped earlier this month. Suffern Partners indicated it was “satisfied with all environmental concerns” and indicated it had no connection with RS Old Mill.

The combined properties have an assessed value of almost $4.6 million, although Novartis filed a lawsuit in July against the Town of Ramapo over the value.

There is no indication what Suffern plans to do with the property, although acting Ramapo Supervisor Yitzchok Ullman says he hopes to pitch the new owners on an appeal to Amazon on bringing its new headquarters to the property.


Read at BioSpace.com


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