More delays for New Jersey mega-mall

March 20, 2009 4:43:13 PM PDT
The opening of the long-delayed Xanadu retail and entertainment complex in New Jersey's Meadowlands has been pushed back again due to a default on a construction loan, a project spokesman said Friday. "We are contemplating a new opening date beyond August 2009 and we have asked our contractors to refocus their work in line with that goal," Meadowlands Xanadu Development spokesman Tim White said in a statement. White said there is no work stoppage at the site.

White said the delay is due to a default by lender Xanadu Mezz Holdings LLC, a company described as a non-bankrupt affiliate of Lehman Brothers. Xanadu Mezz "has refused to fund its share of our construction loans," according to the statement.

White said Meadowlands Xanadu is talking with the project's other lenders, all of whom are up to date on their funding obligations, to try to resolve the issue.

The sprawling $2 billion complex originally was projected to open in late 2007, but that was pushed back to last fall and then to this summer. A new opening date has not been specified.

Located next to the Izod Center and across a highway from Giants Stadium, Xanadu is expected to feature shops, an indoor snow dome, a movie complex, bowling alley, restaurants and an upscale martini bar.

Cabela's, an outdoors, hunting and fishing retailer projected to be one of the complex's major tenants, said earlier this month it expected to open in the spring of 2010 due to the slow economy.

The Xanadu project has pushed on despite the financial problems of original lead developer Mills Corp., which was replaced as general managing partner in early 2007 by Los Angeles-based Colony Capital Acquisitions.

A Colony spokesman declined comment on Friday.

State Senate President Richard J. Codey, who has questioned the project's viability given its delays in opening and the downturn in the national economy, said Friday that the latest delay is "the icing on the cake that flopped before you could get it out of the oven" and called it a "huge setback to a region" that was hoping it would create jobs and revenue.

"Xanadu's project managers need to get their heads out of the sand and answer to the severity of the situation and whether completion is even feasible at this point. Otherwise, the only use I see for the project is to haul it off, plop it down in Central Park, and tell everyone it's modern art."


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