A possible deal to salvage the Xanadu project in East Rutherford appears to be moving forward and could be completed by the end of the summer.
Steven Ross, CEO of Related Companies, a New York City-based real estate development company with a reputation for salvaging troubled developments, offered a preliminary overview of his vision for the stalled $2.3 billion entertainment/sports/shopping center last week at the International Council of Shopping Centers trade event in Las Vegas. This annual convention attracts some 400,000 to 500,000 shopping center owners and executives from around the world.
Thousands of retailers also attend, and Ross attended the event to attract prospective retailers, restaurants, and other attractions to Xanadu. The trade show is closed to the public and few details regarding Ross’s plans for Xanadu have been revealed, but Related had a booth at the show issuing literature referring to the project.
Ross attended the event to attract prospective retailers, restaurants, and other attractions to Xanadu.
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The brochure does not include the name Xanadu, and the paper reported that a Web site for the project has been changed from www.Xanadu.com to www.VisitMeadowlands.com. Xanadu’s omission from the pamphlet and the change in Web address has led some observers to conclude that Related will change the name of the attraction.
No deal yet
Since February there has been much speculation about whether Related will indeed step in to finish the project and get Xanadu opened. It’s unclear whether Related would put up all or a portion of the $500 million needed for completion.
It is generally believed that Related may kick in millions of dollars to jumpstart the project to help Xanadu get the additional financing it needs.
“We can make some assumptions about where they are,” said Jim Kirkos, CEO of the Meadowlands Regional Chamber of Commerce. “It’s safe to assume that Related has agreed to invest some of its own resources to do some due diligence on the project. Related has probably agreed to rebrand the project and reach out to its network of business contacts. If they get a favorable response, they’ll help secure the financing. That’s the phase they’re in right now.”
Joanna Rose, VP of corporate communications for Related, refused to give any details concerning Ross’s appearance in Las Vegas, nor would she give a timeline of when the company might finalize a deal with the project developer.
“It could be a couple months before we have a deal,” Rose said last week. “I don’t really know when we’ll have something to say.”
Kirkos added that he didn’t expect a status update until fall.
Company has ‘the expertise’ to salvage project
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. It currently has no opening date, though most of 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 was supposed to 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.
The Cheesecake Factory, Benihana, Legoland, and Cabela’s were among the restaurants, stores, and attractions that signed leases at Xanadu in 2008.
Related Companies has a reputation for salvaging large projects in trouble. According to the company’s Web site, Related 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,” Kirkos said.
E-mail E. Assata Wright at awright@hudsonreporter.com.