Thursday, May 15, 2008 Last updated: Thursday May 15, 2008, EDT 9:14 PM
BY JOHN BRENNAN
STAFF WRITER
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The opening of the $2 billion Xanadu retail and entertainment center was pushed back Thursday by at least eight months to midsummer 2009 from November.Complex construction for several unique tenants — the project includes an indoor snow dome, a 3,400-seat concert hall and an aquarium — was cited by the developers as the chief cause of the delay.However, business and shopping experts blamed the shaky national economy, which may have made retailers skittish about signing lease commitments. Either way, the delay could prove beneficial for residents who have worried that an opening this fall could snarl highways in the area. The project now is likely to open after a $185 million rail link to the complex is completed in the spring. It also buys more time for a series of road improvements planned for the area.In addition, Xanadu had been scheduled to open midway through the National Football League season, which might have made Sundays more daunting in the area — even if Bergen County’s blue laws forced the retail portion of Xanadu to close.“Traffic concerns are the No. 1 issue that I am confronted with,” said Jim Kirkos, president of the Meadowlands Chamber of Commerce. “If the delay allows the roadwork and mass-transit projects to catch up, it’s hard for me to look at that as a long-term negative. It’s also important that the project gets done right.”Larry Siegel, president of Meadowlands Development, the company building the project, said that many of the tenants are creating venues that are “first or largest in the nation or region.” More “construction and coordination time” was needed, he said.Xanadu spokesman Lloyd Kaplan said that even with the shaky overall economy, national retailers have put Xanadu on “everybody’s short list.”“The issue is just that with some of the extraordinary interactive capacity of some of the venues, we want to make sure we can have the awe-inspiring opening we’ve always planned,” Kaplan said. “You only open once.”Carl Goldberg, the chairman of the New Jersey Sports and Exposition Authority and a prominent real estate executive, called the delay “a wise business decision.”“Even if a certain amount of space was finished, if there is not a critical mass of the site ready, does that preclude a successful opening?” Goldberg said.The sports authority already has received a $160 million payment from Mills Corp. — which preceded Colony Capital as the project’s chief investor — covering the first 15 years of rent on a 75-year lease.The announcement came on the eve of the biggest mall-leasing event of the year in Las Vegas, at the International Council of Shopping Centers convention. Leasing agents said the company needed to be realistic at the Vegas event about the opening date. The convention will begin Saturday, which may have prompted Thursday’s announcement. Retail leasing has slowed in recent months, experts said.“I would say that probably what’s happening here is more a sign of the times than it is a sign of Xanadu’s problems,” said Chuck Lanyard, president of the Goldstein Group, a retail real estate firm in Fair Lawn. “With the economic slowdown that we’re experiencing, they probably need more time to bring these anchors in and do some more negotiating.” Lanyard and other retail brokers said Xanadu will have more impact if there are more tenants in place when it opens. “All great works of art take time,” said Richard J. Brunelli, whose Old Bridge-based firm, R.J. Brunelli & Associates, is representing possible Xanadu tenants. “This project is incredible, so I’m not surprised that it’s going to take longer than expected, and I would expect that the finished product will be even better.”One Xanadu neighbor said he has always been skeptical that the project, given its 2 million-square-foot size, would open within the original time frame.But Gualberto “Gil” Medina, the executive managing director of Cushman & Wakefield’s New Jersey offices, said the timing change should be beneficial.”Everyone expects that the economy is going to turn around mid-year [2009],” said Medina, the former state commerce secretary whose office is directly across Route 3 from the Xanadu site. “So, you open up an incredibly beautiful venue in the summer. You make a huge splash. And hopefully you could then have tremendous success that will carry on for the rest of the year.”David Houston, president of Colliers Houston in Teaneck, said that, given the progress of construction on Xanadu’s exterior alone, he also wasn’t surprised to hear the opening was pushed back.“This is probably a good thing for the developer, in that now is not the ideal time to be opening a new retail development,” Houston said. “And it’s probably better for the developer to get it right than to just get it early.” North Jersey mall managers refrained from commenting on Xanadu’s delay, but the announcement means they will have one more holiday shopping season and another spring without competition from a mega-complex in the Meadowlands.Westfield Garden State Plaza in Paramus, the closest mall competitor, and Willowbrook Mall in Wayne, the area’s second-largest mall after the Plaza, have recently landed several valuable tenants and have not shown signs of a leasing downturn. Willowbrook revealed Thursday that it has landed Apple Computer as a tenant.Staff Writer James Quirk contributed to this article. E-mail: brennan@northjersey.com
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2 >> The opening of the $2 billion Xanadu retail and entertainment center was pushed back Thursday by at least eight months to midsummer 2009 from November.
Complex construction for several unique tenants — the project includes an indoor snow dome, a 3,400-seat concert hall and an aquarium — was cited by the developers as the chief cause of the delay.
However, business and shopping experts
