Triple Five, the owner of Mall of America, hopes to open the revamped site in 2014 Watch video
A file photo of the unfinished Xanadu project in the Meadowlands.EAST RUTHERFORD — Xanadu — the massive and much-derided entertainment and retail complex in the Meadowlands — is getting a major makeover and a new owner.
Triple Five, owner of the Mall of America in Minnesota and the West Edmonton Mall in Canada, said yesterday it has signed a letter of intent to acquire the uncompleted project from the lenders who own the debt on the project. No terms were announced.
A spokesman for the developer said they hope to open in early 2014 with a new exterior and a new name as well — both demands by the state.
The deal was disclosed by Gov. Chris Christie, who had been pushing hard for a resolution on Xanadu. "We’re glad to have Triple Five’s long-term investment in New Jersey and I am confident that the developers who created the most visited mall in the world, due to their vision and innovation, will transform the Meadowlands into New Jersey’s very own Mall of America," Christie said.
The state wants the complex ready for the 2014 Super Bowl, which will be played at the New Meadowlands Stadium. It has also insisted on a total remake of Xanadu’s garish exterior of orange, blue and green — a design critics complained gave it the look of something built out of huge LEGO blocks.
Thursday's announcement came after nearly four months of talks headed by Jon F. Hanson, who was appointed by the governor to seek a solution for Xanadu.
The state had long been in discussions with investor Steve Ross of Related Cos., who also owns the Miami Dolphins. A deal seemed close at hand after Related promoted its interest at the International Council of Shopping Centers in Las Vegas earlier this year with brochures for a re-branded Xanadu.
But talks broke down and Hanson began looking at other developers, including Triple Five, Tampa-based DeBartolo Development LLC, and the Trump Organization.
Hanson said Xanadu had been a priority for the governor and Triple Five was finally selected because of its experience with Mall of America, one of the largest malls in the country.
"Entertainment is a very important part of this project and the Mall of America has that," he said.
There has been no determination whether the state will put public money into the project. Hanson said there have been discussions over the possibility of a tax-exempt component as part of the overall financing, but if the developer opts for the money, the state will require an equity share.
"We’re moving ahead with a defined, realistic plan to turn the complex at the Meadowlands into a real economic engine," he said.
Xanadu, a planned $2 billion retail, sports and entertainment center located alongside the New Jersey Turnpike in East Rutherford, has already been through several owners and changing visions. While privately built, it has been overseen by the New Jersey Sports and Exposition Authority, which saw Xanadu as a future anchor for the Meadowlands Sports Complex. The authority received $160 million for a 15-year lease for the 2.3 million-square-foot complex.
Triple Five, a Canadian conglomerate, had been one of the original bidders for development of the Xanadu site back in 2003, but fell out of contention because its plans included residential housing.
The complex, as it finally evolved, was to incorporate an 18-screen movie house, the country’s tallest Ferris wheel, skydiving wind tunnels, a theater and an indoor ski slope, as well as hundreds of retail shops. But the much-ballyhooed project, which was to open more than two years ago, collapsed under the weight of its costs and an economy that saw many of its proposed tenants looking for the exits.
Developer Colony Capital and its partners, which took over Xanadu in 2006 from the now-defunct Mills Corp., ran into major financing problems when an affiliate of bankrupt Lehman Brothers stopped providing promised construction funds. All construction ceased and with work in limbo for more than a year, the bankers on the project finally took control in August.
Hanson said specifics of what Triple Five has in mind will not be announced until January, but he expected the Ferris wheel — which was put on hold as the financing problems increased — as well as the theaters, will be part of the revamped complex.
However, it will not be called Xanadu.
"That was another prerequisite," Hanson said. "When you think Xanadu now, you get negative connotations. We want a name that conveys excitement. Anything but Xanadu."
Michael Beckerman, a spokesman for the lenders, said the group — which includes Credit Suisse, Capmark Financial Group and an affiliate of Fortress Investment Group — looks forward to finalizing a transaction with Triple Five.
"Today’s announcement follows an intensive and thorough process to select a developer that has the track record and expertise necessary to maximize the value of this development for all stakeholders," he said.
Paul Ghermezian, senior vice president of Triple Five, said they plan to follow the same road map used at its other so-called "destination malls," which attract both local residents and tourists.
Those malls include not only stores, but amusement parks, water parks, aquariums, miniature golf courses, hockey rinks, theaters and hotels.
"Building on the proven success of West Edmonton Mall and Mall of America, we are confident that Triple Five will transform the Meadowlands project into a world-class tourist destination," Ghermezian said. "We have monitored the project since its inception and are uniquely positioned to complete the project and operate it successfully."