Critics say the 4
million-square-foot development would ultimately choke traffic in an already clogged
region. Supporters say the plan would produce a $200 million windfall for the sports
authority and create a new identity for the 27-year-old sports complex.
"This is a landmark day for
the sports authority," said Carl Goldberg, the agency's chairman, after the 11-2
vote. "We think it really defines an entirely new land-use concept.
The development at the 104-acre
Continental Airlines Arena site would become one of the signature achievements of Gov.
James E. McGreevey's first-term, which has been dominated by ethics scandals and battles
over the budget.
"It's one of the most
important pieces of property, and to not keep up with the times and use it would not have
been right," said Joseph Buckelew, a leading Republican and a sports authority
commissioner. "I never thought we would get this point."
Developers plan to break ground
in the spring. Just two obstacles stand in the way of a project that many predicted would
never be built.
The New Jersey Meadowlands
Commission must approve the project after an environmental hearing that will like take
place early next year.
Also, the sports authority must
prevail in a lawsuit filed by rival developer Hartz Mountain Industries, which alleges the
agency violated its charter and the state's open public meetings law when it awarded
Mills/Mack-Cali the right to build on its property.
Hartz President Emanuel Stern
declined to comment yesterday.
The future of the Continental
Airlines Arena won't be known until investors in the Nets and Devils decide whether to
sell the teams. If they do, and the new owners want to stay, the arena likely would be
renovated and connected to Xanadu. If the teams move, the arena may be demolished.
Regardless, critics of Xanadu,
led by the dissenting commissioners, former Chairman Raymond Bateman and financial
consultant Candace Straight, said pursuing a project the size of Xanadu was a major
Bateman said Xanadu would create
a "traffic nightmare" in an area where bumper-to-bumper traffic jams the New
Jersey Turnpike and Route 3 every rush hour.
"I don't buy the economic
growth argument," Straight said. "All we're going to be doing is cannibalizing
our existing businesses."
Competition from Xanadu would
certainly be substantial. The project includes 600,000 square feet of retail space and 1.7
million square feet for entertainment such as movie theaters, restaurants, an extreme
sports park and a surfing pool with man-made waves. The plans also call for the
construction of four office towers, a 500-room hotel and conference center and 12,500
parking spaces in garages.
Terms of the 75-year lease
require the developers to pay $160 million next year to cover the first 15 years of lease
payments. In 2019, the developer would begin annual payments totaling some $75 million by
2029. After that, payments rise each year according to the consumer price index, Goldberg
The developers also would donate
600 acres of wetlands in the Meadowlands for conservation, pay $25 million to improve
those wetlands and contribute $65 million to improve transportation in the region.
Xanadu gets the go-ahead
Thursday, December 4, 2003
The $1.3 billion, privately
funded Xanadu project would fill nearly 5 million square feet around the Continental Arena
site. These are its basics:
Entertainment - 2.1 million
Office - 1.8 million square feet
Retail - 600,000 square feet
Hotel - 500,000 square feet
Construction start goal - April
First-phase opening goal -
December 2005 Source: New Jersey Sports and
EAST RUTHERFORD - The New Jersey
Sports and Exposition Authority board gave its blessing to the mammoth entertainment,
office, and retail project known as Xanadu on Wednesday amid a profusion of rhetoric as
grand as the $1.3 billion project is ambitious.
"The approval of this
project and its imminent construction is one of the landmark events in the history of the
sports authority," agency Chairman Carl Goldberg said, ranking Xanadu alongside the
1970s efforts of Sonny Werblin and Brendan Byrne to create the Meadowlands Sports Complex.
Bob Sommer, a spokesman for joint
developers Mills Corp. and Mack-Cali, called the culmination of an 18-month selection
process for the Continental Arena site a "historic day that takes the Meadowlands
from the 20th century into the 21st century."
Sports authority President George
Zoffinger and board member Joseph Buckelew, who were part of the majority in the 9-2 vote,
talked about how approval of the 5 million-square-foot project would be perceived in 25 to
"They'll say we did the
right thing," said Buckelew, one of four Republican appointees to vote for Xanadu.
The palpable excitement of the
project's supporters was not dampened by any of the remaining potential roadblocks: a
court hearing on a lawsuit brought by rival developer Hartz Mountain Industries that may
take place in late January; environmental hearings in February or March; and potential
wrangling with host community East Rutherford about the borough's share of the project's
KEY FEATURES OF XANADU:
The 1.6 million square feet of
entertainment space would dominate the first phase of construction, which would include an
indoor ski slope, an extreme-sports park, parking garages, and several stores. Also
included would be a luxury spa, an indoor car-racing venue, and a culinary institute. An
8,000-seat minor league ballpark also may be part of the first phase.
The 500,000-square-foot hotel
would have 520 rooms and conference facilities.
Four, 14-story Class A buildings
are planned, with 1.76 million square feet of space. The office and hotel components are
"market-driven," meaning that Mills/Mack-Cali can delay, downsize, or even
cancel those elements. However, the annual ground lease payment to the sports authority
would be the same, regardless of whether those components are built.
Traditional and high-end retail
are to be built as part of this 600,000-square-foot component. Sports authority officials
insist that Xanadu will not be a mega-mall because the retail component will be less than
15 percent of the project's scope.
The project would create 12,500
parking spaces in multilevel garages around the arena, replacing the thousands that would
be lost when the Xanadu components are built atop current parking lots. A proposal to
build parking over Route 120 was scrapped.
Developers Mills Corp. and
Mack-Cali agreed to pay $65 million toward road improvements to handle the additional
traffic created by Xanadu. A stakeholders committee that includes state Sen. Paul Sarlo,
Assemblyman Paul DiGaetano, and local officials will advise the sports authority on how
the money should be spent.
A $250 million combination of
rail and roadway improvements has been proposed by the McGreevey administration. It would
include a connector to NJ Transit's Pascack Valley rail line, but these improvements are
not incorporated into the developer's agreement.
The 75-year ground lease includes
a $160 million upfront payment by the developers for the first 15 years, enough to retire
the existing debt on the arena site. Mills/Mack-Cali would pay $10 million immediately,
and the rest when the permitting and approval process is completed - possibly within the
next 120 days. The annual rent would range from $7.5 million to $9.3 million in years 16
to 22, and increase thereafter based on the Consumer Price Index.
Mills, which owns nearly 600
acres of land in Carlstadt known as the Empire Tract, agrees to turn over that land to an
entity chosen by the sports authority, the state Department of Environmental Protection,
and environmentalists. Mills/Mack-Cali would spend as much as $25 million to restore those
In addition to the rent, about
$100 million paid by the developers would be divided among the 14 Meadowlands district
towns during the first 10 years of the deal according to a New Jersey Meadowlands
Commission payment formula. East Rutherford, which is the host town, and Carlstadt, which
would lose an opportunity for ratables on the Empire Tract, would receive a larger
proportion of the money than the other towns.
The sports authority describes
the entire arena site as historical fill, and if the DEP agrees, all environmental
mitigation costs will be borne by the developers. If any "hot spots" are found
that require the removal of hazardous waste, the developers will receive a credit against
their rent for those costs. The sports authority has environmental insurance to guard
against that possibility. The agency is in the midst of preparing an environmental impact
statement. Source: New Jersey Sports and
"I'm proud to see this
project go through," Barbara Sobel, another Republican appointee, said via a
conference call from the Netherlands.
The project also has won
bipartisan support among Meadowlands-area elected officials, in part because of the
promise of 20,000 construction jobs and another 20,000 permanent jobs at the completed
Former state Republican
gubernatorial candidate Ray Bateman, however, still wasn't buying the idea of mixing
shoppers, skiers, and skateboarders with thousands of office workers - all on top of the
area's already considerable traffic.
"I believe this developer's
dream will become a public nightmare," Bateman said as he cast his "nay"
Bateman predicted "absolute
gridlock" on the 30 or more days that Giants Stadium is filled with football or
concert fans. He also said he didn't believe $65 million for road improvements pledged by
Mills/Mack-Cali would make a dent in the problem. And Bateman called the multilevel
parking garages that would replace the arena's surface parking "a driver's
"Who wants to tailgate in a
garage?" he asked.
Zoffinger insisted that a
proposed $150 million extension of the Pascack Valley rail line and subsequent rail
projects would keep Bateman's fears from coming true.
"Rail to the Meadowlands
should have been put in 25 years ago," Zoffinger said. "If we can achieve it,
that's going to be a significant quality-of-life issue. We'd also take a lot of people who
now take Routes 3 and 46 off the roads when they're commuting into the city."
The addition of a multiuse
project to the sports complex is a progressive approach, Goldberg said.
"This redefines what the
sports authority could and should be," Goldberg said. "It dramatically broadens
the range of entertainment options for the citizens of New Jersey."
New Jersey Sierra Club Director
Jeff Tittel said that although he wasn't necessarily opposed to the project, he did object
to the agreement being signed before completion of an environmental impact statement.
"This is the largest project
on the Eastern Seaboard right now, so don't just go blindly into it," said Tittel,
who wants to know what effects the project will have on traffic, air quality, sewerage,
and wastewater disposal.
Mitchell Hersh, the chief
executive of co-developer Mack-Cali, a real estate investment trust, predicted that
visitors would come a long way to see Xanadu.
"Xanadu is going to be a
one-of-a-kind development that doesn't exist anywhere in the U.S.," Hersh said.
"This will be a major destination location for New Yorkers and for those from
elsewhere, and that's going to bring in additional revenues in the form of tourism."
Those comments didn't wash with
board member Candace Straight, a Bloomfield resident who noted that she is the only board
member who lives within 30 miles of the Meadowlands.
Straight, who cast the other
dissenting vote, was skeptical of the $133 million in annual state and local tax revenue
being touted by the developers. She predicted that Xanadu instead simply would
"cannibalize" other shopping and entertainment options in the region.
The board's vote could have been
vetoed by Governor McGreevey within the next 15 days, but he signed an authorization
shortly after the board cast its ballots. McGreevey has backed redevelopment of the arena
site since May 2002, when it appeared likely that arena tenants Nets and Devils would move
to a new arena in Newark.
Continental Arena itself is not a
part of the developer's agreement. Sports authority officials have discussed a $100
million renovation plan with potential Nets buyer Charles Kushner, but the talks are in
limbo until the Nets decide whether to accept any of the four bids made last month for the
National Basketball Association team.
HOW THEY VOTED:
How the board members of the New
Jersey Sports and Exposition Authority voted on the Xanadu developer's agreement Wednesday
(D - appointed by a Democrat; R - appointed by a Republican):
For Xanadu (9)
President George Zoffinger (D),
banking, real estate
Board Chairman Carl Goldberg (D),
Agency Treasurer John McCormac
Marvin Schmelzer (R), real estate
Joseph Forgione (D), real estate
Fred Potter (D), labor
Joetta Clark Diggs (R),
Barbara Sobel (R), marketing
Ray Buckelew (R), banking,
Ray Bateman (R), former state
Candace Straight (R), banking
Bob Ceberio (D), Meadowlands
Commission excecutive director
Not present (1)
Joseph Plumeri (R), insurance
Source: New Jersey Sports and