Xanadu Fiasco

From the Star Ledger:

Mills Corp. trying to sell stake in Xanadu

The Mills Corp. is trying to sell a substantial stake in the massive re tail and entertainment center known as Xanadu in order to finish construction of the complex at the Meadowlands, state officials said yesterday.

Mills Chairman Laurence Siegel and Chief Operating Officer Mark Ordan told executives with the New Jersey Sports and Exposition Authority of their plans during a crucial, three-hour meeting Wednesday night at the company's New York offices.

The meeting occurred after Carl Goldberg, chairman of the sports authority, the state agency that operates the Meadowlands Sports Complex, demanded Mills explain how it would keep the $1.5 billion project afloat at a time when the company has had difficulty signing tenants for Xanadu. Mills is also struggling through an accounting scandal that has rocked the Virginia-based real estate investment trust, or REIT.

"They said they would be looking for an additional equity provider who could be in the form of a private partner," Goldberg said yesterday. "They constantly need additional money. The estimates are that they are spending $10 million per week on this project."
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In the wake of an accounting scandal, Mills announced in February it would explore all "strategic alternatives," including selling its entire portfolio of 42 regional malls and outlet centers. The company, which has seen its stock price drop 60 percent in the past year, then set a June 13 deadline for bids. In the words of one company official who asked to remain anonymous because of the sensitive nature of the information, Ordan and Siegel were "especially disappointed" in the initial bids, and the company has said little about the sale process since.