Xanadu, the long delayed mega-mall in the Meadowlands, suffered a multi-million-dollar legal setback this week.
Developer Colony Capital lost its court battle to compel an affiliate of bankrupt Lehman Brothers to fork over the $11.2 million loan it had promised.
In filings with the New York State court, Colony said that without the funding there would be “a ripple effect” that would stop work and could kill the project.
The developer did get its other lenders to agree to give it more time to secure the $500 million in financing it needs to finish Xanadu, a retail and entertainment space.
Once financing is obtained, the center could open in less than six months, an executive said.
“I’ve always said this was a two-step process,” Carl Goldberg, chairman of the New Jersey Sports and Exposition Authority, told Reuters. The complex is being built on authority land.
The restructuring of the current debt to make it easier to get new loans was the first step. “That’s taken place…but they haven’t put their new replacement construction loan group in place,” Goldberg said.
The giant development, whose Pepsi-sponsored grand Ferris wheel will be visible from Manhattan, has suffered ongoing setbacks since it was approved in 2003.
Colony Capital took over the project in 2006 and expected it to open in late 2008. But a press tour that spring revealed almost no interior work had even begun. The opening is now targeted towards 2010.
