FRANKLIN, N.J. (CBSNewYork) – A Hamburg man is under arrest and facing charges related to an arsenal of weapons he allegedly made.

Franklin Borough Police say Russell Watt manufactured a variety of weapons. He was found with long guns, pistols, semi-automatic weapons, fully-automatic weapons, high-capacity magazines and hollow point bullets, police said.

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“Semi-automatic to fully automatic machine guns, hand guns, long guns, 12 guage, 16 guage, .40 caliber… several components which showed evidence that someone was manufacturing weapons and firearms,” said Sgt. Nevin Mattessich of the Franklin Borough Police.

Watt was arrested in an unassuming warehouse labeled MJS Precision Incorporated, a metal-working and welding business on Cork Hill Road in Franklin.

Investigators say Watt was manufacturing guns inside the shop, which is right across the street from the Franklin Borough Police Department.

“We’re all surprised and we’re all very concerned being as close to home as it was,” Mattessich said.

Watt, 38, was charged with 12 counts of manufacturing and possessing a variety of semi and fully automatic weapons and ammunition.

Police say a separate firearms investigation initially lead them to Watt. Investigators say he hid them in different areas throughout the shop, but they’re unsure if he was selling them or what other motive he had for having so much firepower.

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“The type of weapons and the amount of weapons that he had, the capability and the tools he had to manufacture the weapons is the most concerning,” Mattessich said.

Residents in the sleepy town were stunned after learning that the father of a toddler had allegedly been building an arsenal.

“We’re just a little tiny town in the middle of nowhere, so you wouldn’t expect something like that,” Virginia Arango said.

Allen Bell was once neighbors with Watt and said he shudders to think what could have been done with the potentially deadly weapons.

“You got a school right up the road and churches all over the place,” he told CBS2’s Hazel Sanchez.

Watt is being held at the Sussex County Jail.

The investigation is ongoing, authorities say. Police believe there may be more guns hidden and other people involved.

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Watt does not have a criminal record or a military background, he said his gun making skills were self taught.