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Buildings
Xanadu Project Gets Cash Infusion
(newyork.construction.com,
November 2006 issue)
A Los Angeles equity firm steps
in with a $500 million investment to buoy the sluggish project.
Also, an industry fundraiser gives a bonus to the Democratic
gubernatorial candidate in New York.
A $500 million light is shining at the
end of the tunnel for the Mills Corp. of Chevy Chase, Md.,
and the Xanadu retail and entertainment complex in East Rutherford,
N.J.
The company endured months of scrutiny
from state leaders and industry observers about its ability
to follow through with construction of the complex that will
wrap around the Continental Airlines Arena at the Meadowlands
sports complex.
Mills announced that it and Kan Am USA
Management, its Germany-based partner in the project, were
set to close a deal with Colony Capital Acquisitions of Los
Angeles for a $500 million equity infusion. The deal would
make Mills a limited partner, with Colony's funds expected
to finance new construction loans. Kam Am and Mills already
invested more than $800 million into the project, which is
pegged to cost another $2 billion to finish. The original
project budget was $1.3 billion.
The recapitalized partnership will honor
the existing contract with the New Jersey Sports and Exposition
Authority, which owns the sports complex. Mills reported that
it is unlikely to recoup its investment because Colony and
Kan Am have priority on returns.
A project team that includes New York's
Turner Construction, Joseph Jingoli & Son of Lawrenceville,
N.J., and Baltimore's Whiting-Turner Construction has completed
excavation, site preparation, a 2,168-space garage, and topping
off of three of five structures.
Xanadu would feature retailers
providing interactive entertainment around their products.
A future phase on the 104-acre tract calls for Mack-Cali Realty
of Cranford, N.J., to add offices and a hotel.
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