Week of August 4, 2003
Snapshot from the Field
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$1.3B, 4.8MSF Xanadu Project Will Transform 'Swamps of Jersey'by JACK LYNE, Site Selection Executive Editor
of Interactive Publishing
EAST RUTHERFORD, N.J. Something big - 4.76 million sq. ft. (428,400 sq. m.) of it - is brewing out in what Garden State favorite son Bruce Springsteen once called "the swamps of Jersey."
That large-scale swamp thing is Meadowlands Xanadu, (www.meadowlandsmills.com) a $1.3-billion mixed-use project just west of New York City in the New Jersey Meadowlands. The ambitiously sprawling venture is scheduled to break ground by year's end on a 104-acre (42-hectare) site in East Rutherford - lawsuits permitting.
And there's a lot of ground to break: The project will include 1.8 million sq. ft. (162,000 sq. m.) of office space, 1.7 million sq. ft. (153,000 sq. m.) of entertainment attractions and 594,000 sq. ft. (53,460 sq. m.) of retail operations.
The mega-project has attracted some high-profile champions, one of the most significant being New Jersey Gov. James McGreevey (D).
"For years, the Meadowlands region has been thought of as Jersey's great swampland, a mere suburb of New York, or, even worse, a garbage dump," McGreevey told a recent Meadowlands Regional Chamber of Commerce meeting. "Its potential has been ignored for too long. We're going to change that and in the process create jobs, economic opportunity and a model for smart growth development."
Redeveloping the Meadowlands, McGreevey asserted, is "a top priority for our administration."
No surprise there. The project's job-generation punch is a priority grabber. Meadowlands Xanadu will create an estimated 20,000 new full-time jobs, plus 21,000-plus construction jobs over the scheduled six-year build-out.
Then there's the very large tax angle. The venture will add an estimated $133 million each year to state and local coffers. With regional tax-sharing, East Rutherford and the surrounding communities "will experience an almost 10-fold increase in tax payments [with] $250 million projected in the first 20 years of operation," McGreevey said.
Winning Mills/Mack-Cali BidIt takes a gob of activity to generate that much job and revenue action. But activity writ very large is Xanadu's essence.
Includes Striking Range of Elements
Those activities were part of the plan submitted by The Mills Corp. (www.millscorp.com) and Mack-Cali Realty Corp. (www.mack-cali.com). The Mills/Mack-Cali bid got the nod for the project in February from the New Jersey Sports and Exposition Authority, topping rival proposals by Forest City Ratner/Hartz Mountain and Westfield America Trust.
"All of the proposals were exceptional, but Mills/Mack-Cali stood head and shoulders above the rest," said Carl Goldberg, chairman of the sports authority's selection committee.
One of the design's standout features is its striking range. Only a few major components include:
The Snow Dome, the United States' first year-round indoor Alpine ski resort, including real snow and chair lifts.
Four 14-story, 440,000-sq.-ft. (39,600-sq.-m.) office buildings
ESPN Skate Park, an indoor venue for extreme wheel sports like skate boarding, in-line skating and BMX biking.
The Ice Palace, a public skating rink and an amateur and professional hockey venue.
A 520-room hotel with conference and exhibition facilities.
Hooptown, a "basketball city" with six NBA regulation courts and locker facilities, which can be used for tournaments, leagues and camps.
A retro movie theater with numbered seating and valet parking.
Wannado, a complete city built to children's scale, promoting learning through role-playing, with kids staffing the city's bank, hospital and post office, broadcasting the news and directing traffic.
The New Jersey Sports Hall of Fame and the New Jersey Music Hall of Fame.
The Bergen Cliff Hawks ballpark, home to that Atlantic League baseball team as well as the Bergen River Dogs, a professional lacrosse team.
UnderWater World, an underground aquarium allowing visitors to view the ocean floor, marine life and habitats.
A luxury spa.
Mills Corp. Chairman and CEO Laurence Siegel calls Xanadu "our crown jewel, the bellwether by which all other developments will be measured."
Project Part of Nets/DevilsThe project could also figure in whether the Meadowlands retains the NBA's New Jersey Nets and the NHL's New Jersey Devils. The two teams are considering relocating to Newark from their current home in Continental Airlines Arena.
The Mills/Mack-Cali proposal preserves the current arena, leaving it to the state to determine the building's future. Xanadu, however, could aid the Nets/Devils retention. The Mills/Mack-Cali team is paying the state $160 million as part of its winning bid. That, in turn, will save New Jersey taxpayers the current Continental Arena's $100 million in outstanding debt. In addition, local officials are touting Xanadu as an attendance-boosting draw for the two teams.
The bigger issue, though, revolves around the $355-million proposal to rebuild Continental Arena. A new arena would more than triple the current facility's 29 luxury suites, which are major revenue generators.
No question, though, about the continued presence of the NFL's New York Giants, who play at Giants Stadium next to the Continental Arena.
"The Xanadu proposal provides maximum entertainment and recreation to the region and is a perfect complement to the Giants organization," said Giants Executive Vice President John Mara. "We believe Xanadu will seriously enhance our opportunity to bring a Super Bowl to the Meadowlands in the near future."
Giants star Michael Strahan also backed Xanadu at a June public forum soliciting public input.
"I think it actually adds another dimension," Strahan said. "When people come to the Meadowlands now, it won't only be for a sports event. There'll be other things for you to do. There'll be things to entertain adults, things to entertain kids, shopping, hotels. You name it, it will be here."
Losing Bidders TryThere, too, is the opposition invariably accompanying projects of such size. Xanadu's biggest challenge, though, has come from the two teams that submitted losing bids.
to Halt Process
Hartz Mountain filed a lawsuit in March seeking to enjoin the New Jersey Sports and Exposition Authority from finalizing the Mills/Mack-Cali contract. That suit was dismissed in May.
But Westfield America Trust initiated similar action in June. Its formal protest contends that Xanadu would exceed the RFP's prescribed boundaries and that the ballpark "appears to be the dimensions of a Little League field." Westfield also argues that the Mills/Mack-Cali proposal would fill in an eight-acre (3.2-hectare) tidal wetland area that Westfield's proposal would've preserved.
Westfield's protest is holding up finalizing the Xanadu contract and breaking ground. Initially, officials hoped all that would be done by August.
Xanadu also raises major infrastructure issues for the state.
"Access and infrastructure planning will be a key factor in determining our success," McGreevey said. "Families can't visit and shoppers can't spend if they're stuck in traffic on Route 3."
The state is making $395 million in transportation improvements this year in Bergen and Hudson counties, including extending light rail and opening a Secaucus transfer station. More infrastructure funding, though, will be needed to accommodate Xanadu - not an easy proposition given New Jersey's $5-billion deficit.
Environmental IssuesIn addition, Xanadu has environmental hurdles remaining. Likely the most significant is securing permits to build on the tidal wetlands.
Surprisingly, though, little high-profile environmental resistance remains. Xanadu helped its case with a contractual provision for the Mills Corp. to donate open space and wetlands to the state. The offer, which takes effect with the final agreement's signing, gives the state the 587-acre (235-hectare) "Empire Tract" on which Mills proposed a Meadowlands Mills mega-mall in 1998.
Similarly, the state's Meadowlands redevelopment plan stresses environmental friendliness. That plan calls for 45 acres (18 hectares) of parks, biking and hiking trails, and 1,250 acres (500 hectares) of open space. The state design will also convert 950 more acres (380 hectares) of landfills into golf courses, a resort and a residential, pedestrian-focused village.
"New Jersey must change the way we think about economic development," McGreevey emphasized. "We cannot sacrifice our drinking water, farmland and open spaces in the name of economic progress."
He added, however, "Smart growth does not mean no growth."
Editor's note: For more on redevelopment projects in the Garden State, see the New Jersey Spotlight in the July 2003 Site Selection or online. More New Jersey coverage is included in the March 2003 Northeast Regional Review.
©2003 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.