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Somebody had to do it....
EAST RUTHERFORD, N.J. — The chair lifts, fans and snow guns are in place, which means that the 800-foot indoor ski slope, the only one in the country, is ready to be covered with manufactured snow. The floor tiles, including some with intricate mosaic patterns and others that sparkle like fireflies, have been laid. The anchor restaurant, a Cheesecake Factory, looks as if it could be welcoming customers before long.
But although its common areas are nearly completed, the 2.4-million-square-foot Meadowlands Xanadu is eerily quiet.
The opening of the $2.3 billion entertainment-and-shopping center, originally scheduled for last November and then postponed until this summer, has been delayed again until some unspecified date next year. Work has slowed considerably at the project, which occupies state-owned land in the Meadowlands Sports Complex, at the intersection of Route 3 and Interstate 95, where the Giants and Jets are building a football stadium.
Even when the economy was robust, some New Jersey politicians and many Wall Street analysts derided Xanadu as a bloated extravaganza. Its ballooning cost helped bring down its original sponsor, the Mills Corporation, which was sold in 2007 to the Simon Property Group. A few months before that sale, private investors led by Colony Capital of Los Angeles took over the project.
Now, however, Meadowlands Xanadu, like many other projects, is enmeshed in the fallout from the banking crisis. In March, the developers accused one of its construction lenders, Xanadu Mezz Holdings, described in court papers as “a nonbankrupt affiliate of Lehman Brothers Inc.,” of defaulting on its loan obligations in recent months. The default “has caused, and is likely to continue to cause, substantial and irreparable damage” to the developers and could threaten the entire project, the complaint said. By this week, Xanadu was $22.9 million short, according to a motion filed on Monday.
Carl J. Goldberg, chairman of the New Jersey Sports and Exposition Authority, which controls the site, said his agency was working with Colony Capital to try to find another lender, a difficult proposition given the credit squeeze. Another option would be “some rearrangement of the debt” with additional capital coming from Colony and its partners, Mr. Goldberg said.
Xanadu Mezz Holdings has sought to have the case dismissed on technical grounds by claiming it was not bound by the contract provisions it is accused of violating. Describing that motion as "patently frivolous,” lawyers for the developers say that the Lehman affiliate had agreed to lend the project $208 million, or 20 percent of the total. Of that sum, $125 million has yet to be delivered. Among the project’s primary lenders are Credit Suisse and Capmark.
Neither Colony nor Lehman would discuss the lawsuit.
Financing is not the project’s only obstacle. In the midst of what Colliers International, a real estate services company, recently described as “the most challenging retail landscape of the past 50 years,” Meadowlands Xanadu is still seeking tenants.
That task is more challenging now that tenants have the upper hand. National retailers are demanding rent reductions or shorter lease terms and are closing more stores than they are opening. Even more ominously, sales are slipping faster in high-quality malls than in lesser ones, according to Green Street Advisors, a Newport Beach, Calif., company that specializes in real estate investment trusts. Another round of retail bankruptcies is expected this summer, Green Street said.
Because of the legal battle and the construction delay, Real Capital Analytics, a research company that tracks real estate investments, has listed Meadowlands Xanadu as the largest of $9.2 billion worth of troubled assets in the New York area. But Dan Fasulo, a managing director of the research group, said he did not think the center would be suspended indefinitely. “In my opinion, the project is too big to fail at this point and will be completed,” he said.
“Larry creates leading-edge projects that are very architecturally special,” he said. “A project like that goes with a time risk, though. You don’t know what economy is going to look like when it is finished.”
Rosebud....
And yet, on the other hand....
Basic Items Emerge as Retailers’ Best Bet
By STEPHANIE ROSENBLOOM
Retailers are using all sorts of tactics to drum up business in this economy, but the simple act of selling food seems to be the best strategy of all.
For months, retailing professionals have said necessities like groceries and household sundries are the only items on many consumers’ shopping lists. Now, first-quarter earnings are proving that true.
BJ’s Wholesale Club, the big-box discount chain, made a profit of $24.3 million, or 45 cents a share, for the three months that ended May 2, up from $17.2 million, or 29 cents a share, a year earlier. Sales at stores open at least a year rose 7.5 percent, not including fuel sales, which significantly hurt the results.
In a conference call with investors, BJ’s said comparable sales of food climbed 9 percent, driven by a 12 percent increase in sales of perishable food. Customer traffic was up 7 percent in the quarter, the strongest it has been in years.
“We had a truly excellent first quarter,” said Laura J. Sen, the company’s president and chief executive.
Apparel, jewelry and sporting goods were among the weakest categories at BJ’s.
Yubba Dubba, Xanadu
EAST RUTHERFORD, N.J. — The chair lifts, fans and snow guns are in place, which means that the 800-foot indoor ski slope, the only one in the country, is ready to be covered with manufactured snow. The floor tiles, including some with intricate mosaic patterns and others that sparkle like fireflies, have been laid. The anchor restaurant, a Cheesecake Factory, looks as if it could be welcoming customers before long.
But although its common areas are nearly completed, the 2.4-million-square-foot Meadowlands Xanadu is eerily quiet.
The opening of the $2.3 billion entertainment-and-shopping center, originally scheduled for last November and then postponed until this summer, has been delayed again until some unspecified date next year. Work has slowed considerably at the project, which occupies state-owned land in the Meadowlands Sports Complex, at the intersection of Route 3 and Interstate 95, where the Giants and Jets are building a football stadium.
Even when the economy was robust, some New Jersey politicians and many Wall Street analysts derided Xanadu as a bloated extravaganza. Its ballooning cost helped bring down its original sponsor, the Mills Corporation, which was sold in 2007 to the Simon Property Group. A few months before that sale, private investors led by Colony Capital of Los Angeles took over the project.
Now, however, Meadowlands Xanadu, like many other projects, is enmeshed in the fallout from the banking crisis. In March, the developers accused one of its construction lenders, Xanadu Mezz Holdings, described in court papers as “a nonbankrupt affiliate of Lehman Brothers Inc.,” of defaulting on its loan obligations in recent months. The default “has caused, and is likely to continue to cause, substantial and irreparable damage” to the developers and could threaten the entire project, the complaint said. By this week, Xanadu was $22.9 million short, according to a motion filed on Monday.
Carl J. Goldberg, chairman of the New Jersey Sports and Exposition Authority, which controls the site, said his agency was working with Colony Capital to try to find another lender, a difficult proposition given the credit squeeze. Another option would be “some rearrangement of the debt” with additional capital coming from Colony and its partners, Mr. Goldberg said.
Xanadu Mezz Holdings has sought to have the case dismissed on technical grounds by claiming it was not bound by the contract provisions it is accused of violating. Describing that motion as "patently frivolous,” lawyers for the developers say that the Lehman affiliate had agreed to lend the project $208 million, or 20 percent of the total. Of that sum, $125 million has yet to be delivered. Among the project’s primary lenders are Credit Suisse and Capmark.
Neither Colony nor Lehman would discuss the lawsuit.
Financing is not the project’s only obstacle. In the midst of what Colliers International, a real estate services company, recently described as “the most challenging retail landscape of the past 50 years,” Meadowlands Xanadu is still seeking tenants.
That task is more challenging now that tenants have the upper hand. National retailers are demanding rent reductions or shorter lease terms and are closing more stores than they are opening. Even more ominously, sales are slipping faster in high-quality malls than in lesser ones, according to Green Street Advisors, a Newport Beach, Calif., company that specializes in real estate investment trusts. Another round of retail bankruptcies is expected this summer, Green Street said.
Because of the legal battle and the construction delay, Real Capital Analytics, a research company that tracks real estate investments, has listed Meadowlands Xanadu as the largest of $9.2 billion worth of troubled assets in the New York area. But Dan Fasulo, a managing director of the research group, said he did not think the center would be suspended indefinitely. “In my opinion, the project is too big to fail at this point and will be completed,” he said.
“Larry creates leading-edge projects that are very architecturally special,” he said. “A project like that goes with a time risk, though. You don’t know what economy is going to look like when it is finished.”
Rosebud....
And yet, on the other hand....
For months, retailing professionals have said necessities like groceries and household sundries are the only items on many consumers’ shopping lists. Now, first-quarter earnings are proving that true.
BJ’s Wholesale Club, the big-box discount chain, made a profit of $24.3 million, or 45 cents a share, for the three months that ended May 2, up from $17.2 million, or 29 cents a share, a year earlier. Sales at stores open at least a year rose 7.5 percent, not including fuel sales, which significantly hurt the results.
In a conference call with investors, BJ’s said comparable sales of food climbed 9 percent, driven by a 12 percent increase in sales of perishable food. Customer traffic was up 7 percent in the quarter, the strongest it has been in years.
“We had a truly excellent first quarter,” said Laura J. Sen, the company’s president and chief executive.
Apparel, jewelry and sporting goods were among the weakest categories at BJ’s.
Yubba Dubba, Xanadu
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