View Full Version : Meadowlands Redevelopment & Xanadu

08-23-2006, 05:10 PM
Let me first say that I was against the Xanadu project when it was first proposed, I supported the Hertz Corporations vision which was more of a tourist attraction. Xanadu in my opinion was and is too much of a glorified mall. Now with the financial problems with the Mills Corp and the entrance of Colony Capital, there are hints that all the entertainment venues, such as the first indoor skiing in North America will be eliminated. If that is the case, then I call on the immediate shut down of the project. We New Jerseyans were promised a certain venue, that is what was approved when the Mills Corp won the bid, and that is what I have been supporting since they won the bid. If they can not deliver the baseball stadium, the indoor skiing and the rest of the tourist attraction items, then Xanadu should killed and quickly.

This thread will be for discussing the various redevelopment opportunies at the Meadowlands Sports Complex, this includes any thoughts people have on making the place more inviting. As I have said in another thread, right now the Meadowlands is just an asphalt and cement wasteland with a couple of stadiums. In my view the Meadowlands is a terribly depressing place to be. For the number of people who attend events at the Meadowlands - it should be a show place for New Jersey. Hmmm - maybe having the NJ Hal of Fame at the Meadowlands there isn't half bad, although I still think the Hall of Fame should be in central New Jersey, somewhere around Great Adventure.

Anyway, here is an article on the latest on the Xanadu project, which was in the Star Ledger today...

Investment firm swoops into swamp to rescue Xanadu
Talks end with Colony Capital taking over mall from struggling builder

From daybreak Friday until yesterday's early hours, a handful of the country's top lawyers, bankers and real estate executives camped out in a suite of offices on West 26 th Street in Manhattan.

Over cheap danishes and the occasional platter of sandwiches from a nearby deli, Richard Saltzman, the president of Colony Capital, arguably the top real estate investment firm in the world, offered a lifeline to Laurence Siegel, the embattled chief executive of Mills Corp., a company once seen as the nation's top mall developer.

Mills' stock was plummeting by the day, and Siegel had run out of time on Xanadu, the $2 billion retail and entertainment center he was building in the Meadowlands.

When the talks finally ended with a handshake at 2 a.m., Siegel had a deal that, if finalized next month, should save the highest-profile development project in New Jersey from almost certain failure and pull Mills out of its free fall.

Colony announced it will take over Xanadu part amusement park, part shopping mall for $500 million and a commitment to secure a construction loan that will finish the project. Mills will remain a minority partner in Xanadu but will have no additional obligations other than the $485 million it has committed. The German fund KanAm, which has spent $342 million on Xanadu, and Mack - Cali Realty of Cranford, which has spent $32.5 million on Xanadu, will remain as minority partners.

State officials, who had told Siegel two weeks ago his company clearly didn’t have the money to finish the project, were quick to herald the emergence of Colony as the new lead developer for some of the state’s most valuable real estate.

‘‘Their reputation is pristine, their track record is strong, and they bring both expertise and financial weight,’’ said Carl Goldberg, chairman of the New Jersey Sports and Exposition Authority, which operates the Meadowlands Sports Complex.

Still, questions remain, and Gov. Jon Corzine, who last week said he was deeply troubled by Mills’ financial problems, cautioned against assuming Xanadu’s troubles are behind it.

‘‘It’s a start, it’s not a finish,’’ Corzine said of the deal. ‘‘It sounds like a great idea based on what’s going on with the stock of Mills Corp. But it’s hard to comment until you know more of the details and it gets to be binding, because it’s a process of negotiation.’’

Mills executives declined comment beyond Siegel’s statement that the agreement with Colony ‘‘will enable the realization of Meadowlands Xanadu for the people of New Jersey and the metropolitan area.’’

Saltzman, who declined interview requests, said in a statement he was ‘‘thrilled to be joining the Meadowlands Xanadu partner - ship.’’

Judging from Mills’ stock price, which surged 15 percent on the news, the deal ends a tumultuous 12-day stretch for the Marylandbased real estate investment trust. Mills’ future was up in the air last week because, according to Wall Street analysts, the company was wasting hundreds of millions of dollars on Xanadu. On Thursday, state Senate President and former Gov. Richard Codey said the state should ‘‘pull the plug’’ on the project and start from scratch because Mills didn’t have the money to finish the job.

Yesterday, Codey insisted the deal with Colony showed Mills needed to get out of the way.

‘‘Now, hopefully, we have a company here that can build what New Jersey was promised and sign the 200 leases that are going to be needed to make this project successful,’’ Codey said.

George Zoffinger, chief executive at the sports authority, said Colony’s investment showed the state made the right call in sticking by Mills and the master plan for Xanadu even as the company worked through its corporate problems and Wall Street predicted the worst. He said Colony’s commitment to build everything Mills promised, including North America’s first indoor ski mountain and a minor league ballpark, was a vote of confidence for Xanadu’s conceptual design.

‘‘When a lot of people gave up, we forged ahead with hope, and when smart people like Colony say this makes sense, that reaffirms what we’ve been saying,’’ Zoffinger said.

Colony, whose assets are valued at $22 billion, owns several hotel chains as well as two Atlantic City casinos, Resorts and the Hilton.

Its gaming investments raised questions about whether Colony was seeking an inside track to operate slot machines at the Meadowlands Racetrack, something the sports authority has been trying to do for years. Zoffinger, however, said Colony’s gambling business never entered the discussions, and the company is focused on building a successful family entertainment and retail center.

Whether that can be done remains to be seen. Mills produced only three leases for Xanadu despite two years of touting a project that is just five miles from Manhattan and in the center of the most densely populated region of the country.

State officials and industry executives speculated that most of those difficulties were a result of Mills’ financial problems; that no retailer or restaurant executive wanted to commit to a mall the developer could not complete.

Others suggested the concept was flawed, with asking rents too high and demand too low given its proximity to retail outlets such as the Garden State Plaza in Paramus and the Short Hills Mall.

Some critics of the project now question whether Colony will follow through on its commitment to build the entertainment venues Mills has promised, and whether the company would back away from the deal if the state didn’t let them out of some of those obligations.

‘‘If the sports authority insists the entertainment venues are built and Colony is willing to do that, then this is a good deal, but I still don’t think that’s possible,’’ said Irwin Horowitz, a lawyer for Hartz Mountain Industries, which unsuccessfully sued the state to stop Xanadu. ‘‘I don’t think these people have the intention of building the same venues that the sports authority envisions.’’

Workers on the Xanadu job site, where the massive steel frame is rising, expressed relief the project is going to continue. The hundreds of construction jobs are just the beginning of the economic benefits Mills promised; the company said there would be some 19,000 permanent jobs at Xanadu.

‘‘We’re used to the idea of different players moving in and out of a project,’’ said Mike Caputo, spokesman for Joseph Jingoli & Sons, Xanadu’s general contractor. ‘‘We’ve got a lot of work with Mills. They have never had a hiccup. We’ve been happy so far, and now we’ll be happy with it in the future.’’

So this is another debacle that our wonderful politicians have gotten New Jerseyans into.