EAST RUTHERFORD, NJ-Meadowlands Xanadu, the $2-billionunfinished New Jersey shopping mall, was taken over by lenders froma group led by Colony Capital LLC after constructionstalled. The creditors, including Credit Suisse Group AG,Capmark Financial Group Inc. and an affiliate of FortressInvestment Group LLC, had given the Colony-led group untilyesterday to raise additional equity to no avail.

The lenders are negotiating with new developers to complete theproject, the group said in a statement. The Colony-led group hadbeen in talks with New York developer Related Cos. about partneringon Xanadu, and the lenders plan to continue discussions withRelated and other potential developers. As part of thesenegotiations, the new operator will be required to acceleratecompletion of the project, which will include refinishing thewidely criticized exterior of the building and implementing afull re-branding campaign for the project.

The complex's opening will generate thousands of jobs and tensof millions of dollars in sales and payroll taxes for New Jersey,as well as significant revenue for municipalities in Bergen Countythrough the PILOT program. Gov. Chris Christie has pledgedthat any state funds committed to the project will be in exchangefor an economic interest in the project. The lender group isbeing advised by leading investment bank Moelis & Company, aswell as Sills Cummis & Gross and Weil Gotshal & MangesLLP.