Hartz's suit, which names both the NJSEA and the two rival developers, charges that the state authority's decision to go with Mills and Mack-Cali's Meadowlands Xanadu proposal was illegal on several grounds. For one thing, Hartz claims that the NJSEA violated the RFP process by not involving the public.

For another, the suit claims that the state agency broke its own bylaws on not competing directly with nearby commercial uses by picking a proposal that included a major retail component (Hartz itself has substantial retail and office holdings in the region). And third, the suit says that the winning partnership didn't live up to the RFP's instructions to propose alternative uses for the arena itself.

Arlington, VA-based Mills' and Cranford, NJ-based Mack-Cali's Xanadu proposal calls for the 104-acre site in East Rutherford, NJ to be redeveloped as a $1.2 billion combination of retail, sports and entertainment, hotel and office uses, with the existing arena to be retained until the state decides to do with it. Hartz's losing Expo Park proposal, while on a similar scale, would have had little retail and would have replaced the arena with a convention center. A third competing proposal was offered by Westfield.

Complicating the issue are the numerous troubles surrounding a plan to build a new arena in downtown Newark to house the NBA Nets and NHL Devils, current tenants of the Continental Airlines Arena. An increasingly likely scenario is that the two teams will stay in the existing arena at least through 2008 when their leases expire, and perhaps well beyond if the Mills/Mack-Cali project gives the surrounding site the kind of "downtown" setting the two teams crave.

The suit follows an earlier request filed by Hartz for an administrative hearing on the decision-making process, although the company is challenging the fairness of such a hearing as well because it would be presided over by the NJSEA's own top attorney. No hearing has been scheduled to date. The various parties could not be reached for comment.