Meadowlands Xanadu Costs Rise

EAST RUTHERFORD, NJ-Troubled retail-REIT Mills Corp. has filed a document with the SEC stating that its Meadowlands Xanadu project here will cost $2 billion to construct, $500 million more than it had previously reported. The company, which has been exploring a sale after heavy losses and accounting flaws, had announced last month that it was looking for a joint-venture partner on the 2 million-sf retail-entertainment project.

Mills has not obtained construction financing for Meadowlands Xanadu, and management says the funds are not likely to come in unless it is able to execute “significant remaining leasing activity,” according to the filing. Last month Mills management told the New Jersey Sports & Exposition Authority, the agency that owns the site, that it were close to signing 800,000 sf of leases for the project.

If financing for the project is not obtained, Mills is required to provide the financing itself, which could lead to a write down on the development. So far, Mills has spent $380 million on Meadowlands Xanadu.