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Dream inches closer to becoming reality

No work at Xanadu site, but project secures key permits in a busy year

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    Triple Five says it needs a water park to complement the existing mall structure, or the project is 'not economically viable.'  – FILE PHOTO
    Triple Five says it needs a water park to complement the existing mall structure, or the project is 'not economically viable.' – FILE PHOTO

    The hulking, garish complex once known as Xanadu remains dormant in East Rutherford, two years after state officials tapped Triple Five to rescue the failed project.

    Yet the Canadian firm's plan to revive the development as American Dream Meadowlands took a major step forward this year, as it secured a host of state and federal permits. With regulatory issues nearly resolved, Triple Five can now focus on the complex financial package it needs to complete the 2.8 million-square-foot retail and entertainment hub.

    And though a lawsuit by the New York Giants and Jets threatened to derail the plan, state officials say they hope to reach a solution. That would allow the operator to move ahead in its application process to the New Jersey Sports & Exposition Authority, the landlord of the Meadowlands Sports Complex.

    Litigation aside, Triple Five has navigated a dense regulatory system in its bid to add water and amusement parks to the current complex. And in July, the firm unveiled a partnership with DreamWorks Animation to theme the destination with characters like Shrek and Kung Fu Panda.

    "There is progress in every element of this project," said Alan Marcus, Triple Five's spokesman for American Dream. He cited advances not only in permitting, but also in financing and retail leasing.

    Marcus said a key next step for the project is to conclude negotiations with Xanadu's previous lenders, clearing the way for Triple Five's pursuit of nearly $2 billion of additional financing. The site is still controlled by lenders for Colony Capital, the private-equity firm that was forced to turn over the site in 2010.

    "It's a very complex project," Marcus said. "There is any number of moving parts to it, just by … the nature of its history. And then you've got to unwind some of that history before you can go forward."

    Plans for the Meadowlands site go back a decade, but development has been plagued by financial woes like those that led Colony to abort construction in 2009. Triple Five, which owns the Mall of America, in Minnesota, stepped in Dec. 22, 2010, hoping to rebrand the project and complete it with an expanded entertainment portion.

    Those expansion plans have been the subject of reviews by several state and federal agencies this year, largely because those components would cover about 5.5 acres of wetlands. Triple Five executives have said the project is "not economically viable" without the water and amusement parks, which would total around 600,000 square feet.

    But the project has passed muster with regulators, securing approval from the state Department of Environmental Protection in July and a critical permit from the U.S. Army Corps of Engineers in October.

    The developer has waded through the process with the help of the sports authority. Wayne Hasenbalg, who took over early this year as CEO of the agency, said resolving the regulatory issues was a priority, "given the importance of the project."

    "I'm really pleased with the role that we played," Hasenbalg said. "We weren't responsible, for the most part. We weren't the applicant, but as the landlord for the project, we wanted to make sure that any regulatory issues were being addressed."

    Also looming is a lawsuit filed in June by the Jets and Giants, which have raised concerns over the impact of the new parks on game-day traffic around MetLife Stadium. As recently as this month, Triple Five and the teams were "sharing documents and information" in an attempt to have the sports authority move the project forward, Hasenbalg said.

    But whether any portion of the complex will be open by the February 2014 Super Bowl at MetLife Stadium is far from clear. Triple Five and state officials had previously made predictions to that end, but have since shifted to focusing on when construction will resume.

    Hasenbalg said the project schedule is out of his hands, though "it would be my great hope that parts of that building could be available for use for Super Bowl-related activities."

    One thing is much clearer: if and when Triple Five resumes construction, one key task will be to rid the property of its infamous multicolored exterior.

    "People certainly do notice it, don't they?" Marcus said. "I think it's safe to say that this New Jersey landmark will be altered."

    E-mail to: joshb@njbiz.com

    On Twitter: @joshburdnj

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    Joshua Burd

    Joshua Burd

    Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. His email is joshb@njbiz.com and he is @JoshBurdNJ on Twitter.

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