NEW YORK — Major surgery is in store for Xanadu Meadowlands.
This story first appeared in the January 3, 2011 issue of WWD. Subscribe Today.
And a big first step in overhauling the beleaguered, massive mixed-use complex happens today, when top officials from Triple Five, the developer of Mall of America, meet on-site for the first time with Xanadu creditors. Late last year, Triple Five and the creditors signed an agreement whereby Triple Five takes over and redevelops the stalled project, which is located in northern New Jersey on Route 3 in East Rutherford.
Everything is on the table, from changing the project’s name to overhauling the exterior and reworking the retail space and tenant roster, according to Triple Five. For those driving along Route 3, the incomplete Xanadu is an eyesore. It’s also been a drain on the New Jersey economy.
“This project needs help. It needs to be redesigned for productivity,” Maureen Bausch, executive vice president of business development for Triple Five, told WWD. “Now we are taking it to the next level, fine-tuning the plan design and the name, and so on. We are getting to work to see how to make it a reality.”
Some design options will be reviewed today. “Some [retail] spaces are very, very deep. Retailers would prefer more store frontage. They don’t want the consumer to walk very far. They want guests to be able to get to a lot of stores and attractions with the shortest amount of work,” Bausch said.
The Cheesecake Factory, Benihana, Legoland, and Cabela’s signed leases but never opened. For other retailers that haven’t signed on, Triple Five’s strategy could be an opportunity to open doors.
Right now, Xanadu is far from aesthetically appealing. “We know no one likes the exterior, and that we need to generate some ideas to improve the exterior,” Bausch said. “We are also looking at a name change.”
Bausch said the goal is to have Xanadu open by late 2013 or early 2014, which in either scenario really requires putting “the pedal to the metal.” Xanadu, conceived as a five-story retail and entertainment center by the Meadowlands Sports Complex, was supposed to have opened in 2007 but got mired in financing and developing problems. In attracting financing and tenants, it was billed as the largest retail/entertainment complex in the U.S. and the third largest in the world, with 4.8 million square feet, including 2.3 million for retailing. Along with entertainment and retailing, sports, office and hotel facilities, there is an indoor snow dome that can be seen from the highway.
Like the successful Mall of America, currently the nation’s largest mall/entertainment complex, Xanadu was envisioned as a combination of entertainment and retail. Triple Five now believes Xanadu could include some of the same elements seen at Mall of America, and concepts that are not there, as well. “It will have some of its own personality and identity,” Bausch assured. “This is too valuable of a piece of property not to do something fabulous. It has a ton of potential.”
Among those from Triple Five expected to visit Xanadu today are the Ghermezian brothers, the Canadians who own Triple Five but also live in New York; Bausch, and various Triple Five executives in operations, design and marketing. Triple Five also owns the West Edmonton Mall in Canada.
In August, a consortium of lenders — including Credit Suisse Group AG, Capmark Financial Group and Fortress Investment Group LLC — that had financed Xanadu wrested control of the project from Colony Capital, Dune Capital and KanAm. Xanadu was originally a project of Mills Corp., which was purchased by Simon Property Group and Farallon Capital Management in 2007. Mills was one of the first American developers to expand overseas when it built Madrid Xanadú in 2003 and later sold it to Ivanhoe Cambridge.