Meadowlands Xanadu Pays State

EAST RUTHERFORD, NJ-Developers Mills Corp. and Mack-Cali Realty were expected to hand over $64 million today to the New Jersey Sports & Exposition Authority, a down payment of sorts for the rights to develop their Meadowlands Xanadu mixed-use project surrounding the existing Continental Airlines Arena. The state-owned land is part of the Meadowlands Sports Complex, which includes Giants Stadium and the Meadowlands Racetrack.

The payment follows the near-unanimous approval of closing the development deal with Mills and Mack-Cali, earlier this week, by the authority’s 15-member board of commissioners. The lone dissenter was Raymond Bateman, a former state senator who has consistently opposed the project, citing potential traffic problems in the region.

Meadowlands Xanadu, of course, is planned as a $1.3-billion mixed-use complex totaling more than four million sf of space. Its uses will include a substantial retail component, a hotel, several office buildings, a minor league baseball stadium and an indoor ski mountain. Preliminary site work is already under way.

The deal also calls for Mills and Mack-Cali to pay another $96 million to the NJSEA by next April. In the meantime, authority officials say that $37 million of the initial payment will be used to pay off tax-free bonds on the site, while the rest will be used for wetlands preservation in the region, including the 600-acre so-called Empire Tract in the Meadowlands region. Mills and Mack-Cali’s agreement with the NJSEA also gives the two developers the right of first refusal on the Continental Arena itself if the authority opts to dispose of it.

Although Mills and Mack-Cali have a deal with the NJSEA, the project is not completely free and clear. Legal challenges from rival Hartz Mountain Industries, and from environmental groups remain alive. And the developers still have to come to terms with the primary tenant of the sports complex, the New York Giants football team.

The Giants’ lease with the NJSEA gives the franchise a major say in anything that’s developed within the complex, and the Giants have yet to sign off on Xanadu, publicly citing concerns of their own regarding traffic. A spokesman for Meadowlands Xanadu did not return calls for comment, and NJSEA officials could not be reached.

The Giants, of course, have some construction issues of their own. As reported by GlobeSt.com, the team has a deal with the NJSEA to build a new Giants Stadium adjacent to the current one, with construction slated to occur simultaneous to phases of the Xanadu project.