Newark, NJ – Colony Capital Acquisitions, LLC has completed its recapitalization of the Meadowlands Xanadu, taking over from the Mills Corporation the new project that will bring indoor skiing to northern New Jersey as the first snow dome in North America. The giant 2.2 million square-foot development will feature sports, leisure, shopping and family entertainment in the Meadowlands area across the Hudson River from New York City.
The first snow dome to be built in North America, indoor skiing and snowboarding at Meadowlands Xanadu will be patterned after Xanadu Madrid in Spain.
Under the agreement, Colony will lead the $1.5 billion additional financing needed to complete the project, including $500 million in equity and approximately $1 billion in debt and additional capital. The debt is being financed by Credit Suisse. Colony is the managing general partner in a joint venture that also includes the Dune Real Estate Funds, KanAm USA Management XXII Limited Partnership, and The Mills Corporation.
“We are pleased to have the complex negotiations of the last few months behind us and are extremely excited about the project’s momentum. The financing, major tenants, and long-term vision are now in place to make Meadowlands Xanadu the entertainment destination of choice for millions of residents in the tri-state region. We believe this will be the nation’s premier entertainment-oriented retail venue,” said Richard Saltzman, President of Colony Capital.
“This agreement confirms and harmonizes the interests of Meadowlands Xanadu, the Giants and Jets, and the New Jersey Sports and Exposition Authority,” said Gary Rose, Chief of the New Jersey Governor’s Office of Economic Growth. “We look forward to accelerated activity at the Meadowlands, the eventual opening of an extraordinary entertainment and shopping venue, and the best new stadium in the NFL.”
Patterned after the Mills Corporation Xanadu Madrid complex in Spain, Meadowlands Xanadu will be composed of five distinct districts, each offering interactive experiences and branded activities and events in the areas of fashion, food and home, entertainment, children’s activities, and sports.
The project will be anchored by the Snow Dome, a 780-foot ski slope for skiing and snowboarding, complete with equipment rental, a lodge and associated amenities; Wannado City, a 60,000 square foot playroom where children can experience hundreds of career possibilities in an indoor city built to fit their size; a Culinary Arts Center, with live cooking demonstrations; the largest ferris wheel in North America, offering panoramic views of New York City; and Sky Venture, a unique simulated sky diving adventure.
The project has signed leases with six anchor tenants occupying over 500,000 square feet: outdoor outfitter Cabela’s, a 2,250-seat concert hall by AEG Live for live performances, an 18-screen movie theater by Muvico, Strike MX’s upmarket martini bar with bowling alleys, young women’s clothier Forever 21, and The Children’s Place, a national children’s retailer.
“We couldn’t be more excited to launch our first New Jersey store at Meadowlands Xanadu, which will bring our world-famous retail experience to our loyal customers in the region,” said Dennis Highby, President and Chief Executive Officer of Cabela’s. “We believe our brand of hands-on, try-it-out retail adventure will be a great fit for a sports, retail and entertainment destination that is all about providing first-class style, experience and fun. We are also very excited about the new structure and ownership team now in place.”
Colony will be the managing partner of the venture, joined by a group led by Laurence C. Siegel and other Mills executives who will transition to the new partnership and have been involved in the project since its inception. “I am pleased to partner with Colony Capital as together we see this venture to fruition. Meadowlands Xanadu will be one of the most exciting destinations anywhere with attractions and activities for every age group. I believe it is the most imaginative and exciting development project being executed today,” Siegel said.
The venture has confirmed that it has construction agreements with Joseph Jingoli and Sons, Turner Construction Company, and the Whiting-Turner Contracting Company. Construction is currently underway, and the partnership hopes to achieve a target completion date of late 2008.
The recapitalized partnership plans to honor the approximately $25 million in financial commitments previously made to the metropolitan region by the partnership. New Jersey Transit Authority plans to construct a rail spur off the Pascack Valley Line, including a new station located near the stadium, providing rail access to the Sports Complex from New Jersey and Manhattan. The total estimated transit time from Penn Station in Manhattan is 28 minutes. The tentative completion for the rail line is spring 2009.
“We are delighted to be working with Colony to restore financial stability to this development and move the Meadowlands Xanadu project forward. We share the same commitment to this unique entertainment and retail destination,” said KanAm President James Braithwaite.
Under the final terms of the agreement, Colony, Dune and KanAm will join the existing partnership with Colony replacing Mills (who will now be a limited partner) as managing general partner. Colony, Dune and KanAm will commit $500 million in equity to complete the project. The Partnership also will be buying out Mack-Cali’s retail interest in the project but will continue to be partners with Mack-Cali in the office and hotel components. The Mills no longer has any future financial obligations post closing related to the project.