With thousands of jobs for the Meadowlands region at stake, the state is considering an offer from an investor to revive the stalled Xanadu project in East Rutherford, a $2.3 billion entertainment/retail/sports complex on Route 3.
Related Companies, a New York City-based real estate development company, may kick in millions to complete the project, which has seen its opening date pushed back several times.
Xanadu needs about $500 million to be completed. It’s unclear whether Related would put up all or a portion of the money needed for completion.
Related Companies helped stabilize three Manhattan developments in the early 1990s.
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‘Highly unlikely’
Located at the Meadowlands Sports complex, Xanadu was supposed to further solidify the Meadowlands as a tourist and entertainment destination and generate millions of dollars in revenue for the region, which includes Secaucus and North Bergen.
The project was also expected to generate about 20,000 construction jobs and another 20,000 permanent positions once completed.
Originally expected to be financed by the Maryland-based Mills Corp., Xanadu ended up being backed by Colony Capital, a private equity firm, after it became apparent that Mills would be unable to finance the project as planned. Colony Capital took over in August 2006, committing up to $500 million of equity. Colony also arranged for construction loan financing to help fund building costs.
The complex was supposed to open its doors two years ago. The 2008 debut was then pushed to August 2009, then again to 2010. The attraction currently has no opening date, though most its external structure is finished.
The massive complex, which is supposed to feature five theme-oriented shopping and entertainment districts, was envisioned to be a cross between an indoor theme park and a mall.
The completed complex will have a total of 4.8 million square feet, with 2.3 million square feet available for lease, plus an aquarium, an indoor snow dome, two skydiving tunnels, movie theaters, and up to 200 stores.
Before the recession took hold, a number of restaurants, retail stores, and entertainment attractions jumped on board to lease space in Xanadu, which developers said would redefine leisure time in the Northern New Jersey/New York City region.
The Cheesecake Factory, Benihana, Legoland, and Cabela’s were among the restaurants, stores, and attractions that signed leases at Xanadu in 2008. But now many have put their plans for Xanadu on hold.
In January, Cabela’s CEO Tom Millner reportedly told investors it was “highly unlikely” that the sporting goods giant would still open a location at Xanadu.
Other potential Xanadu leaseholders have put their plans on the back burner.
Developer has saved trouble properties in the past
Details of Related Companies’ potential involvement in Xanadu’s completion have not been released. But CEO Stephen Ross has touted the company’s ability to rescue troubled developments and properties.
According to the Related web site, for example, the company helped stabilize Tiffany Mews, the Tribeca Tower, and the Aurora – all in Manhattan – during the soft real estate marker of the early 1990s. Later that decade, Related developed the Time Warner Center at Columbus Circle.
“Their track record is such that the company certainly has the expertise needed to guide Xanadu towards completion and get it out of this standstill position it’s in currently,” said Kirkos.
Should Related not work out, advisors to Gov. Chris Christie have suggested the state take over the project, which would likely lead to a scaled back vision for Xanadu.
E-mail E. Assata Wright at awright@hudsonreporter.com.