EAST RUTHERFORD, NJ-The chosen developer for has signed just three retail tenants for its massive Xanadu retail/entertainment project and uncertainty abounds, so officials of the New Jersey Sports & Exposition Authority, the state agency that owns the site in the Meadowlands, this week called in officials of the Arlington, VA-based Mills Corp. to explain.

According to published reports, NJSEA chairman Carl Goldberg and CEO George Zoffinger sat down this week with chairman Laurence Siegel and COO Mark Ordan of the troubled Mills for a meeting that lasted several hours.

According to reports, what came out of that meeting was Mills’ stated intention to find a buyer for a major portion of its stake in the project, with the aim being a cash infusion to get the $1.5 billion project completed. A Mills spokesman confirmed the details of the meeting but declined further comment. Officials of the NJSEA could not be reached for comment.

For Mills, which already has the Cranford, NJ-based Mack-Cali Realty Corp. as a partner in Xanadu, with financial backing from the German fund KanAm, the obvious problem is cash flow. The loan route has dried up, according to sources, because Mills signed just the three retail leases for the massive project, and therefore has very little to work with as collateral. In the meeting, according to reports, Siegel and Ordan told NJSEA officials that they’re close to signing some 800,000 sf of retail leases—the project will total some two million sf. To date has signed deals only the Cabela’s sporting goods chain, Children’s Place and Muvico, the latter for a multiplex cinema. Mills has also yet to line up operators for the project’s recreational features, including a proposed indoor ski mountain.

The alternative, Siegel and Ordan told NJSEA officials this week, will be for Mills to find a buyer for a major portion of its stake in the project that’s said to be costing the company upwards of $10 million a week at this early-construction stage.

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