EAST RUTHERFORD, N.J. -- More than 100 acres of the New Jersey Meadowlands would be developed as a family entertainment complex with an indoor ski slope, indoor surfing, a Formula One racetrack, a minor league baseball stadium and office towers, under a $1.3 billion redevelopment plan chosen recently by the New Jersey Sports and Exposition Authority.
The project, called Meadowlands Xanadu, is the proposal of the Mills Corp., the Virginia-based mall developer, and the Mack Cali Realty Corp., a Cranford, N.J., office developer. The sports authority selected the partnership from among three finalists who bid to redevelop the Meadowlands site, as the New Jersey Nets and New Jersey Devils negotiate a move from the Continental Airlines Arena to a proposed arena in downtown Newark.
The 9-2 vote by the sports authority ended a contentious selection process that began in September, when six developers submitted proposals, and heated up in recent weeks as the two leading finalists waged a publicity war and some officials called for hearings to solicit public opinion.
Within the next 60 to 90 days the sports authority and the developer will negotiate the smallest details of the deal. If that goes smoothly, both predicted that construction on the project could start as soon as this summer and be completed within six years.
George R. Zoffinger, president and chief executive of the authority -- which operates Giants Stadium, Meadowlands Raceway and the arena -- said the project would turn "the most valuable location in the region" into a family destination with its combination of sports, entertainment, shopping, lodging and offices.
Among Xanadu's unusual attractions are the Snow Dome, an indoor skiing center that will be the cornerstone of the complex. The only similar center is under construction by Mills in Madrid. The Indoor Wave will offer year-round surfing for accomplished and beginning surfers. The complex will also include an indoor Formula One racing oval, museums, a music and sports hall of fame, a luxury spa, a 520-room hotel, cooking schools and a child-scale city where children can play roles in mock settings like a hospital, bank, post office and airport.
Laurence C. Seigel, Mills' chairman and chief executive, said Xanadu would assemble a host of new and often untried attractions in a new configuration in which retailing would run a close second to entertainment. The Meadowlands area, surrounded by 16 million people living within a 20-mile radius, is "the best piece of dirt in the U.S.," he said, and the ideal testing ground for innovation.
Most important for the sports authority, Zoffinger said, the choice would bring the agency an immediate $160 million in upfront lease payments on the land. That money would be used to retire the authority's debt on the deficit-ridden Continental Airlines Arena and avoid $90 million in interest payments over time. The annual payments in lieu of taxes to communities surrounding the 106-acre site would increase tenfold, he said, and the developers have agreed to contribute $65 million of their own funds to help with infrastructure improvements like realigning roadways.
No taxpayer money will be needed for the project, he said, though future mass-transit access would require public money.
Tipping the balance
It was these economic considerations and the guaranteed upfront payments that tipped the authority toward the Mills proposal, Zoffinger said. The authority has made no deal to share in recurring revenues generated by the complex, though that could be negotiated later.
In many ways, the selection of the Mills Corp. saves both the state and the mall developer from a costly confrontation. Mills has the development rights on 560 acres of sensitive Meadowlands wetlands on which it had planned to build a mall. While some federal environmental hurdles have been overcome, New Jersey's state government and an army of environmental groups have remained opposed to the project and threatened legal Armageddon over the plan. On Wednesday, the developer said it was prepared to donate the proposed mall location, known as the Empire site, to the state and invest substantial money in cleaning it up.
"This stood head and shoulders over other proposals, and the environmental benefits were nothing short of compelling," said Carl Goldberg, the authority's chairman.
The losing proposals came from a partnership of Hartz Mountain Industries and Forest City Ratner, whose plan included a convention center, and the Westfield Group, which proposed converting the arena into a performance space.
The authority's selection drew immediate criticism from some Republican lawmakers in Bergen County who said the authority, which consulted local advisory committees but held no public hearings, was not open enough in making the choice. Other critics predicted that the site would become a traffic nightmare and do little to bring mass transit to the heart of the Meadowlands, as the sports authority originally promised.
But the prospect of the huge project brought together many other, usually warring, factions.
Environmentalists like William Sheehan, the Hackensack Riverkeeper and longtime opponent of the Mills plan to build on the more environmentally sensitive parcel, cheered the selection as a rare instance of wetlands preservation in a time when federal conservation efforts appeared to be drying up.
Labor unions applauded the estimated 21,000 construction jobs envisioned over the six-year, phased construction of the complex. And business groups, including the Meadowlands Chamber of Commerce, simply cheered that something was being done to stimulate the local economy. Jim Kirkos, president of the chamber, said that public officials usually just talk about providing an economic engine. "Here, they kept their word and acted," he said.
Edward B. Vinson, executive vice president of Mills and the project director, said the complex would be built in phases, with work beginning first on the family entertainment components and a half-million square feet of retail space.
A performance space
Under the plan, the Continental Arena will eventually become a performance space, though specifics are yet to be worked out. But construction on the rest of the project can take place, Vinson said, without interfering with the two teams' use of the arena for the duration of their lease, which runs until 2005. If their Newark plans collapse, he said, the arena could be refurbished.
Mitchell E. Hersh, chief executive of Mack Cali said the hotel and 1.7 million square feet of office space would be built in the final phase of the project -- timing that might coincide with the end of the economic downturn and a return of a stronger market for office space.
"We think the family entertainment and the sports will be a magnet to draw tenants to this area," Hersh said. "It's the accessibility and the visibility of the site that will make it a place where people want to be."
Meadowlands Xanadu at a glance
Size:More than 100 acres
Developer:Mills Corp., owner of Arundel Mills mall and Virginia's Potomac Mills
Time frame:After finalizing details, the first phase of construction would start this summer and the project would be complete within six years.
Year-round indoor ski slope
Year-round indoor surfing
Formula One racetrack
Minor league baseball stadium
Office space totaling 1.7 million square feet
Half-million square feet of retail space
Music and sports hall of fame
Continental Airlines Arena, once vacated by pro basketball and hockey teams, would become a performance space.