Jets, Giants Sue Over Mall Near Stadium - WSJ.Com

[BaumerJet]

By HEATHER HADDON

The New York Jets and Giants sued Thursday to block the further development of a shopping and theme-park complex adjacent to MetLife Stadium, saying its owners hadn't negotiated in good faith on issues of traffic and whether the complex could operate on Sundays.

 

"We have bent over backwards to try to accommodate this project because the governor has stated how important it is to him and to the state," said John Mara, co-owner of the Giants, speaking alongside Jets owner Woody Johnson during a 30-minute interview Thursday.

 

The men were making their first joint comments on the American Dream complex, which would consist of a mall once known as Xanadu, as yet unfinished, and a newly proposed 639,000-square-foot indoor theme and water park.

 

The National Football League teams argue that the complex's vehicle traffic would cause unbearable congestion for their fans. The team owners also want the bulk of the complex to be shut down on the roughly 16 Sundays when they play at home a year, a limit on the cars visiting the complex on those football Sundays and a traffic-management plan.

The project's new developers—Triple Five of Edmonton, Canada—don't want to close on Sundays, arguing it would undercut their business. Bergen County's blue laws forbid shopping on Sunday, but the proposed theme park could operate on that day.

"We cannot interrupt service to our entertainment patrons at the time when they most want to visit," said Alan Marcus, a spokesman for Triple Five. Sundays are key days for tourists and families who will potentially visit the complex, he said.

 

The teams signed off on the original Xanadu complex in 2006 before building the MetLife Stadium. If they had known the mall would expand to include the entertainment wing, they would have had "second thoughts" about building the new stadium there, said Mr. Johnson.

"We probably wouldn't have built this stadium if we had known that they would build something across the street that would flood the roads with traffic and make it impossible for our fans to get to the game," he said.

The shell of the mothballed mall has become a multicolored eyesore seven miles west of Manhattan. An indoor ski slope was completed, but few of the individual stores were finished. Roughly $2 billion was invested in the complex as of 2010, according to a state report.

The complex represents a delicate political situation for Gov. Chris Christie. The Republican governor has pledged to revive the mall that has bedeviled two past governors, but the teams are significant economic players in the state.

 

Mr. Christie and his staff have been actively involved in the negotiations, with an agreement close to being struck in December, according to the teams and Triple Five. The cause of the talks' breakdown is disputed, but negotiations since have been less frequent and productive, both sides said.

 

Spokesmen for Mr. Christie declined to comment Thursday.

 

The lawsuit comes two weeks after the New Jersey Sports and Exhibition Authority voted to transfer the property's lease and development rights to the developer, and allow it to do preliminary site work. The authority owns the land under the stadium, the mall and the proposed theme park.

 

"We had all the information we needed to be able to make a decision," said Wayne Hasenbalg, president of the authority, about the vote. "I'm hopeful. I've continue to be hopeful, and I'm hopeful that the dialogue will continue."

 

The team owners' complaint seeks an injunction against allowing the development of 2.8 million square feet of leasable space to move forward. The teams argue they have the right to sign off on any modifications to the project, as spelled out in a 2006 agreement signed by them, the state and Xanadu's original developers, the Mills Corp.

 

"The teams will be adversely affected by any further significant development at the Meadowlands that interferes with fans' and patrons' ease of access," stated the 27-page complaint filed in Bergen County Superior Court.

 

First begun in 2003, the Xanadu shopping complex was slated to be one of the largest entertainment and retail complexes in the U.S., with 2.2 million square feet of leasable space. It was scheduled to open in 2007, but the economic recession, in part, caused some of the lenders to go bankrupt. Work stopped in 2009.

In 2010, Mr. Christie announced an agreement with Triple Five, the developer of the Mall of America in Minnesota and the West Edmonton Mall in Alberta.

 

"I promised the people of Bergen County and the state of New Jersey that action would be taken to revitalize the complex at the Meadowlands and today I am delivering on that promise," Mr. Christie said in 2010. "We're glad to have Triple Five's long-term investment in New Jersey."

 

In 2011, Triple Five announced it would add a separate amusement and water park next to the standing shopping complex. The addition required the developers go through an approval process to build in the wetlands area regulated by federal and state authorities.

 

Meanwhile, the teams objected to the extension, arguing that it would jam the congested area with additional traffic on game days. It can take an hour to clear the 80,000-seat stadium after a game, with traffic the leading complaint from stadium patrons, the owners say.

 

A state report earlier this month found that the impact of the amusement park addition would be "on balance, quite minimal" in terms of the stadium.

 

The report faulted the teams for not fully considering road-widening projects and mass-transit access, among other issues. A traffic consultant retained by the state to compare studies presented by Triple Five and the teams also sided with the developer's models, saying that the teams' approach "exaggerates the level of traffic congestion."

 

Mr. Marcus said the developers hoped to complete financing to take control of the mall from its creditors by the end of June, thereby allowing it to sign lease agreements. The mall could open two years after construction begins, and discussions have taken place to secure anchor tenants, he said.

 

Triple Five plans to invest $1.7 billion in new money as part of opening the complex. Mr. Marcus wouldn't say how much they must spend to satisfy the debt with its creditors.

The teams are heavyweights in New Jersey. They invested $1.6 billion in private money in the stadium, site of the Super Bowl next year. The NFL's premier event is expected to generate an estimated $550 million in economic activity in New Jersey and New York.

 

Mr. Johnson, additionally, is a prominent national political donor to Republicans, and last year was GOP presidential candidate Mitt Romney's campaign chairman in New York.

 

The owners said they were open to negotiations continuing during the legal proceedings, and they don't want to kill the mall project. But they said the results of the talks so far had led them to consider seeking assurances that the bulk of the complex be closed during all stadium events where at least 50,000 people attend.

 

"The longer this lawsuit goes on…the less flexible I'm going to be in coming to an agreement on this," Mr. Mara said.

 

Write to Heather Haddon at heather.haddon@wsj.com

 

http://online.wsj.com/article/SB10001424127887323728204578515673045639386.html