Merck plans to close its Summit campus and establish a new global headquarters in Kenilworth, the company announced Tuesday.
Merck originally planned to bring 1,000 more employees to Summit, which is near the Chatham border, and make it the company's global headquarters.
Some Chatham officials saw that as an opportunity for new development in historically industrial districts of the borough.
Chatham Mayor Bruce Harris said Tuesday proposed Master Plan amendments for that section of Chatham are expected to be discussed at the Oct. 28 Chatham Borough Council meeting. While Merck's planned expansion was a factor, it was not the motivating factor, he said.
"The Master Plan amendments relating to the industrial districts were motivated primarily by our interest in seeing if we could expand the permitted uses in the River Rd./Watchung/Commerce area and make it more attractive," he said.
Merck plans to close its Summit campus and Whitehouse Station facility, and move to existing facilities in Kenilworth. The move is expected to start next year and be completed by 2015, the company said. Merck also announced it is cutting 8,500 employees.
The company said it arrived at its new headquarters plan "after re-evaluating its real estate needs in the state" and determining "it could achieve greater cost savings and operational synergies by closing both its Summit campus and its main Whitehouse Station facility."
Summit Mayor Ellen Dickson said Merck leaving was disappointing and would be "felt throughout Summit," but she is optimistic a new company will move in.
“The Summit campus is a highly desirable location and never stays available for long," she said. "We are optimistic that Merck’s departure will be another company's gain."
In September, Chatham's Planning Board was weighing possible amendments to its master plan that mentioned Merck's planned expansion among the factors taken into consideration.
According to a draft of proposed amendments, one objective was "to leverage future development opportunities along the River Road/Watchung Avenue gateway area resulting from adjacent expansion of Merck in Summit (the Summit facility is expanding from 1,800 existing employees to 2,800 by the middle of 2015 as Merck establishes the site as its Global Headquarters."
The proposal called for new zoning regulations that would promote a wider variety of uses, including multi-family housing, taller buildings and allow for the possibility of a boutique hotel in Chatham near the Union County border. Officials have said the entry point to Chatham is not as attractive as it could be.
Correction: An earlier version of this story gave an incorrect date for when the Chatham Borough Council plans to discuss proposed Master Plan amendments.