$1B EnCap Project Suddenly in Doubt

Amid those turns, mostly financial, reports surfaced that EnCap was considering selling out of the project, which it obtained the rights to in 2004, as reported by GlobeSt.com. Since then, EnCap has spent more than $50 million on remediating the former landfills on which the project is slated to rise. An EnCap spokesman declined to comment on a possible sale.

"The [New Jersey] attorney general's office was informed by EnCap on Monday that serious consideration has been given to a sale of the project by EnCap," Christopher Gale, public information officer for the New Jersey Meadowlands Commission, tells GlobeSt.com. "This office has no further information at this time."

The New Jersey Meadowlands Commission is the state agency that oversees planning and development in the Meadowlands region, and is the agency that approved EnCap's participation in the project three years ago. In the wake of the latest developments, the commission's board voted last night to spend up to $100,000 on legal counsel to protect its interests.

Besides the rumored sell-out by EnCap, those developments include site remediation costs that have soared from original estimates of $113 million to something closer to $200 million. The target date for completion of that process, as well, as been moved back from August 2008 to late 2008, at the earliest. And actual sitework has been suspended since April because of a dispute between EnCap and state officials over financing and tax benefits.

Finally, EnCap officials this week reported that they had picked up a $16-million letter of credit from First Southern National Bank to ward off possible default of the company's agreement to clean the landfills. Company officials declined further comment.