Xanadu: Mills, Mack-Cali Get Nod for $1.3B Project

The losers were a partnership of Secaucus, NJ-based Hartz Mountain Industries and Forest City Ratner, and a third proposal by the California-based Westfield Development Group. The nod gives the Arlington, VA-based Mills and the Cranford, NJ-based Mack-Cali the exclusive right to negotiate a developer's agreement.

The Meadowlands Xanadu proposal had gotten some muscle in recent weeks with endorsements from a number of local politicos, as well as from the New York Giants football organization. In fact, the Giants, tenants of the Meadowlands Sports Complex's Giants Stadium, are now being listed as a development partner.

"The Xanadu proposal provides maximum entertainment and recreation to the region and is as perfect complement to the Giants organization," said John K. Mara, EVP and general counsel of the Giants, in a written statement. "We believe it will enhance our opportunity to bring a Super Bowl to the Meadowlands in the near future."

The Xanadu proposal totals 4.76 million sf of space and has a projected price tag of $1.3 billion. It will encompass everything from Snow Dome, this country's first year-round indoor ski slope with real snow and chairlifts, to a wide variety of other educational, recreational and entertainment venues, to a minor league baseball stadium. On the business side, it will include four, 14-story, 440,000-sf office buildings and a 520-room hotel and conference center.

Development officials say it will create 19,000 construction jobs and 20,000 permanent jobs, with the latter adding up to an annual payroll of $1.24 billion. Annual state and local tax revenues are pegged in the $133 million range.

"We've taken our strategy of developing innovative concepts and created what we feel is a masterpiece for the Meadowlands community," says Mills chairman and CEO Laurence Siegel. "Meadowlands Xanadu is our crown jewel."

"We are well-positioned to take advantage of Xanadu's broad base of entertainment and recreation uses to attract an excellent tenant base," adds Mack-Cali CEO Mitchell Hersh, referring to the office component. "We are confident that it will benefit both the Sports Complex and the Northern New Jersey region."

Besides the developer's agreement, some other matters have to be ironed out. The most notable one is an arena in downtown Newark to replace the Continental Airlines Arena as the home for the NBA's Nets and NHL's Devils. The Newark arena proposal is currently stalled in the state legislature because it will require a substantial amount of public money, and redevelopment of the existing arena's site is being held captive in the process.

If the Xanadu deal does stick, Mills has already announced that it will donate the 587-acre Empire Tract, elsewhere in the Meadowlands, to the state for open space and wetlands. Mills had an alternate – and highly controversial – super-regional shopping mall proposal for the Empire Tract.

The Mills/Mack-Cali proposal also survived an often vitriolic media battle with rival Hartz/Forest City, with the two sides fighting it out with full-page ads in local newspapers, and even videos. Hartz and Forest City officials could not be reached for comment.