At the Oct. 3 NJSEA Board meeting, delays in both Meadowlands projects were discussed.
Xanadu deadlines repeatedly passed
Colony Capital, a Los Angeles-based investment firm, reached a preliminary agreement in August with the Mills Corporation, the original lead investor, to transfer control over the estimated $2 billion Xanadu project and set a Sept. 21 deadline to close the deal. The deadline was later pushed back to Sept. 27 but there has still been no closing.
Carl Goldberg, the chairman of the NJSEA, stated he didn't believe another deadline would be announced but the project was definitely going forward.
"I spoke with Richard Saltzman, the president of Colony Capital, last week," he said. "They are continuing to work towards the closing and there are no due diligence issues that have come up that might stop them. The problem is simply the volumes of paperwork required to effectuate the closing. We have attorneys working 12 hours a day on it."
Goldberg added, "Rather than putting a deadline on it, Mr. Saltzman and the NJSEA have agreed that we will continue working as diligently as possible to get this done."
NJSEA President George Zoffinger expressed further confidence in the deal's completion.
"The most promising thing about this whole development is that Colony Capital has assured us that they want no changes to the master plan, but that they are going to build exactly what we approved," he said. "Over the last couple of months there has been consternation with regard to whether or not they were going to put in the entertainment parts of the master plan, but the answer is clearly yes. This project is going to be an economic engine for this region for decades to come."
There was additional uncertainty about Mills Corporation's stability following the Oct. 2 announcement that longtime Mills CEO Laurence Siegel had retired over the weekend. While Mills stock climbed slightly following the announcement to close to $17 a share, Mills' stock was trading at nearly $60 a share a year ago.
The company remains under federal investigation for abnormal accounting practices.
Zoffinger was not fazed by Mills' problems.
"Mills reached an agreement with Colony Capital, which takes one of the uncertainties off of their balance sheet," he said. "The effect of Mills on this project going forward will be negligible because Colony Capital will be taking over the project."
New stadium master plan under review
The NJSEA made an additional decision to temporarily defer a vote on the preliminary master plan for the new professional football stadium to be built in the Meadowlands for the Giants and Jets. The estimated cost of the new stadium is $800,000, and it is scheduled to open by the 2010-2011 season.
NJSEA Commissioner Joseph Buckalew discussed the reason for the postponement.
"Due to the complexity of this resolution, we are holding off adopting it until Oct. 12," he said. "This will give the board an opportunity to examine it fully."
Goldberg stated the reasoning behind the postponement.
"It's out of respect and courtesy for the importance of this matter and the need for each commissioner to review the information and ask the questions that they need to ask," he said. "They have to be confident that they understand exactly what they are voting on next week."
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