Gtech Holdings Corp. is close to a deal to sell its landmark West Greenwich headquarters to its neighbor Amgen Inc., a prospect that has the state scrambling to keep the lottery systems giant in Rhode Island, sources say.
State Sen. Kevin A. Breene, who is also the West Greenwich town administrator, said Friday that after months of negotiations the two companies appear to be close to completing a deal for the 50-acre property off Interstate 95.
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“It’s not official, but I think it will happen soon,” said Breene. Representatives from Amgen and Gtech have discussed a possible sale with the town administrator, he said.
Gtech and Amgen officials refused to comment for this story.
Breene also confirmed that the Rhode Island Economic Development Corporation has been working with Gtech to find an alternate site. Real estate sources in the state have told Providence Business News that Gtech is looking at Northern Rhode Island as well as communities in Massachusetts to relocate its headquarters, including Norton, Mass, which is 20 miles northeast of Providence.
Michael McMahon, the executive director of the EDC, refused to comment.
“What this boils down to is that Amgen has made a commitment to have a major presence in Rhode Island and they need more space,” said Breene.
Amgen owns two large properties near the Gtech building. About 650 employees work at a 200,000 square-foot cell-culture manufacturing plant, for which it received federal regulatory approval in January to begin production of its rheumatoid arthritis drug Enbrel. A second, 250,000 square-foot plant now is under construction and slated for completion in 2005. Combined, Amgen is in the process of spending more than $1 billion on the projects.
He added that he did not get the impression Gtech was disappointed with the business climate in Rhode Island.
“Quite frankly I think from Gtech’s perspective it has a lot to do with work force and travel needs. The company started in Rhode Island and I think they want to stay here,” said Breene.
Real estate experts say the price tag for the Gtech property – one of the state’s prime commercial spaces – could exceed $30 million.
The Gtech building, constructed in 1990, is assessed at $11 million by the town of West Greenwich. The corporate campus also includes a five-year-old day care center, assessed by the town at $1.6 million. Annually, Gtech pays approximately $800,000 in real estate taxes to West Greenwich.
According to local commercial real estate brokers, Gtech has been scouting out several sites for temporary office space, an indication it needs time to build a new headquarters.
Michael Giuttari of NAI MG Commercial Real Estate in Providence said Paul Donnelly, a Gtech real estate specialist, contacted Giuttari about the availability of 55,000 square feet of office space in North Smithfield, for which Giuttari is the broker. Guittari said Donnelly was interested in temporary office space – from a year to two years – and visited the property at 582 Great Road.
“That visit did not come of anything,” said Giuttari, who represents Holson Burns, a subsidiary of Newell Rubbermade of Atlanta. Holson, which pulled out of the property near Rt. 146 in November, is owned by Brickle Realty Group.
Sources say Gtech is trying to hammer out a deal with Amgen that would involve leasing manufacturing space at the West Greenwich building back to Gtech, at least temporarily.
In regards to a permanent space for Gtech, Giuttari and other real estate brokers say the company is looking to Northern Rhode Island and beyond the Rhode Island state line.
One property being considered is the former Durastone site in Smithfield, off Interstate 295. Real estate experts say the 44-acre site is considered a great location.
“This is a terrific site, one that would be ideal for a corporate campus,” said Jen Cookke, president and CEO of F.H. French Company in Lincoln. She said her company was in negotiations to buy the Durastone site seven months ago. The property does not have a local owner, said French, but is being brokered by CB Richard Ellis’ Providence office.
Cookke added that she is hopeful to get involved in a potential development of the property, which now is mostly vacant land.
