Meadowlands Xanadu selected by N.J. Sports & Exposition Authority.

The Mills Corporation announced that its Meadowlands Xanadu proposal was selected by the New Jersey Sports & Exposition Authority, providing them with the exclusive right to negotiate a developer's agreement, for the development of a $1.3 billion family entertainment and recreation complex with an office and hotel component at the Continental Arena site in East Rutherford, N.J. The Xanadu team is comprised of The Mills Corporation, Mack-Cali Realty Corporation and the New York Giants.

The arena's main tenants, the New Jersey Nets and New Jersey Devils, hope to relocate to an arena that would be built in downtown Newark.

The New Jersey Sports and Exposition Authority board voted 9-2, with

one abstention, in favor of the plan. It beat two other contenders for the site. Assembly Speaker Albjo Sires, DWest New York, and Senate co-Majority Leader Bernard Kenny, D-Hoboken, announced their preference for the $1.3 billion proposal, one of three finalists, along with Hartz Mountain Industries/Forest City Ratner's Expo Park and the Westfield Group's Arena Place. While a majority of Mills' projects nationally are malls, its officials insisted that the 4.8 million-square-foot Meadowlands project is predominantly an entertainment center and office complex.

The sports authority operates the Meadowlands complex that includes the arena and Giants Stachum. It conducted no public hearings on the plans for the 104-acre arena site in East Rutherford.

This plan was endorsed last year by the New York Giants, the authority's most important tenant The team said the proposal best addresses its concerns about parking, access and use of the site on game days, and would enhance its efforts to host the 2008 Super Bowl.

Talks are continuing on a financing plan to erect a $355 million arena in Newark, which contemplates a $200 million contribution from the city.

The Xanadu proposal features the Snow Dome, America's first year round indoor Alpine ski resort with real snow and chair lifts. Other entertainment and recreation features mdude The House of Blues, Cheesecake Factory, UnderWater World aquarium and a PBS Kids Pavilion. The project will also include office and hotel space totaling 2.2 million SF, consisting of four 14-story, 440,000-SF office buildings and a 520-room hotel with conference and exhibition facilities.

"Mack-Cali, which has a long history in developing premier office properties, is well positioned to take advantage of Xanadu's broad base of entertainment and recreation uses to attract an excellent tenant base. As a New Jersey-based company, we are very proud of Xanadu, and are confident that it will benefit both the Sports Complex and the Northern New Jersey region," said MackCali chief executive officer Mitchell Hersh.

In addition to the Snow Dome indoor ski resort, Xanadu will feature a baseball park to house the Bergen Cliff Hawks minor-league baseball team and the Bergen River Dogs professional lacrosse team. Additional active and spectator activities include ESPN Skate Park (extreme wheel sports), an indoor surfing wave, a grand movie palace, a small format live entertainment venue and a Wildlife Museum. Xanadu will also include the Meadowlands Area YMCA, with multi-purpose areas, spaces dedicated to basketball and gymnastics, an aquatic center, locker rooms and a child care facility.

Xanadu will also include Wannado, a 150,000-SF entertainment concept where children can role-play adult professions. The fashion area will provide a luxury spa, cooking school and exclusive European retail, such as Zara, Mango, Mexx, and Carolina Herrera, to support the recreation and leisure activities.

The project will also include office and hotel space totaling 2.2 million SF, consisting of four 14-story, 140,000-SF office buildings and a 520-room hotel with conference and exhibition facilities. "Mack-Cali, which has a long history in developing premier office properties, is well positioned to take advantage of Xanadu's broad base of entertainment and recreation uses to attract an excellent tenant base. As a New Jersey-based company, we are very proud of Xanadu, and are confident that it will benefit both the Sports Complex and the Northern New Jersey region," said Mack-Cali chief executive officer Mitchell Hersh.

Xanadu will create more than 19,000 construction jobs, resulting in $1.17 billion in estimated personal income. At final build-out, Xanadu will result in more than 20,000 jobs translating to $1.24 billion in income annually. The redevelopment of the arena site will generate more than $133 million per year in state and local tax revenue. Assuming the completion of a successful development agreement, The Mills Corporation will donate the 587 acre Empire Tract to the State of New Jersey, a significant acquisition of open space and wetlands for the state. Mills has joint-ventured a portion of its share of the project to its long-time private equity source, Kan Am. The terms of the joint venture call for Kan Am to fund two-thirds of the Mills total equity requirement consistent with terms previously disclosed in the company's public filings.