By Barbara A. Preston | Posted April 2, 2026
The Montgomery Township Planning Board voted unanimously on March 23 to recommend to the township governing board that a 44-acre corporate office complex on the corner of Route 206 and Orchard Road is an "Area in Need of Redevelopment" (AINR). This could pave the way for tax breaks (Payments in Lieu of Taxes or PILOT), and other fiscal tools such as bonding for the owner/developer of the property.
23 Orchard is a huge office building on the corner of Route 206 and Orchard Road. It previously housed Applied Data Research (ADR).
Clarke Caton Hintz employee Michael Sullivan prepared the 42-page report titled "Preliminary Investigation of an Area in Need of Redevelopment (Non-Condemnation) 23 Orchard Redevelopment Study Area" dated March 2, 2026, and presented it to the planning board on March 23. The purpose of the report, he said, is to determine if the 23 Orchard Study Area qualifies as an AINR under the criteria of the NJ Local Redevelopment and Housing Law (LRHL).
The Township Committee directed the Planning Board to conduct this preliminary investigation and specified that the area is being considered as a “non-condemnation redevelopment area,” meaning the power of eminent domain would not be used.
Sullivan's preliminary investigation finds the building has been significantly under used for more than two consecutive years. See findings below.
Lost Rental Income: Persistent vacancies in the 220,037-sf research/office building have resulted in a yearly estimated rent loss exceeding $2 million.
The sustained revenue loss and the aging property create financial pressures, increasing the likelihood the owner will pursue a tax appeal, which would result in a reduction of the property’s assessed value and a decrease in tax revenue for the township.
The 23 Orchard property is assessed at $5M. In 2024, the property owner paid $343,972 in municipal property taxes, which support local schools, roads, and help offset residents' property taxes. In 2025, the owner paid $226,556 according to the Montgomery Tax Office.
Office vacancy at 23 Orchard has significantly impacted rental income. Here’s a breakdown:
Vacancy Rates:
2023: 88.96% vacant (150,537 sq. ft.)
2024: 85.40% vacant (144,508 sq. ft.)
2025: 75.64% vacant (127,988 sq. ft.)
If Venture X vacates, the 2025 vacancy rate could increase to 87.28%.
Lost Rental Income:
2023: $2.97 million lost rental income.
2024: $2.76 million lost rental income.
2025: $2.39 million lost rental income (potentially increasing to $2.76 million if Venture X vacates).
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The Clarke Caton Hintz report highlights persistent and high vacancy rates as the primary justification for the AINR designation. Sullivan says the property owners reported the building has remained under 50% occupancy since 2016. The entire third floor is 100% vacant.
A major tenant (Venture X Skillman) is underperforming and may vacate, which would increase the 2025 vacancy to approximately 87%, Sullivan added.
The property is developed as a research/office building, ample parking, a solar energy solar field, and a sewage treatment system. The building was constructed in three phases between 1979 and 1985.
According to the report, "large corporate office parks and large shopping malls have become obsolete, vacant, and difficult to market. Today they are characterized in development circles as 'stranded assets.' In order to encourage private entities to work together with municipal governments to redevelop stranded assets, it may be necessary to resort to more potent development tools than traditional land use planning and zoning.
"By specifying that a vacant shopping mall or office park is an area in need of redevelopment, a municipality can offer potential private sector partners redevelopment tools such as tax exemptions and abatements to encourage them to repurpose stranded assets."
Montgomery Township Committee may now adopt a resolution to designate the 23 Orchard as a Redevelopment Area.
Redevelopment Plan: If designated, township officials would create and adopt a Redevelopment Plan by ordinance. A Redevelopment Plan is adopted by ordinance by the Township Committee before any project is initiated. A plan may be created in such a way as to provide for detailed recommendations regarding traffic circulation, open space, housing, urban design, and architecture. At a minimum, pursuant to N.J.S.A. 40A:12A-7.a, a redevelopment plan is required to address a series of required elements and should be consistent with the municipal master plan or designed to effect the master plan.
