Wednesday, August 23, 2006

Tom Barrack to the rescue

From the Star Ledger:

Colonizing New Jersey

Colony Capital is coming to the rescue again.

When the development of a sports stadium-shopping mall-hotel resort known as Hawks Town turned shaky in 2004, Los Angeles-based Colony stepped in. With deep pockets and an affinity for complicated deals, it salvaged the elaborate project in Fukuoka, Japan.

Yesterday, Colony looked as if it were preparing a similar megamillion-dollar rescue effort -- this time of Xanadu, the Mills Corp.'s troubled entertainment-retail complex in the Meadowlands.
The deal is emblematic of Colony's -- and its founder Thomas Barrack's -- real estate moxy.

Barrack, 59, turned to real estate development after working as an international finance lawyer and a deputy undersecretary in the Department of the Interior under President Ronald Reagan.

A native California resident of Lebanese descent, Barrack has made his biggest mark with his contrarian investment strategy. "Tom can see where the world is going and where markets are going," said Donald Trump, speaking about his friend Barrack in a 2003 edition of the industry magazine Hotels.

"He has a prodigal ability to look into the future and be 100 percent correct," Trump said.

Mr. Barrack is no stranger to this blog, he's been the focus of many articles posted here:

Who is Tom Barrack and why should you care?

"I feel totally safe playing polo on a field full of pros," says the bronzed 58-year-old. "But when amateurs are all over the field, someone can get killed. They have more guts than brains. They charge after every ball and don't know when to hold back."

It's the same with the U.S. real estate market right now: "There's too much money chasing too few good deals, with too much debt and too few brains." The amateurs are going to get trampled, he explains, taking seasoned horsemen, who should get off the turf, down with them. Says Barrack: "That's why I'm getting out."

Investors take heed. Barrack may be an amateur at polo, but when it comes to judging markets, he's the ultimate pro.


Anonymous Anonymous said...

The Xanadu debacle will problably make a great investment, that will only pay out a decade from now. So Mr.Barrack is probably on track.

I can see several things happening that will make it a great investments.

Things like local gov't regionalization, allowing for lifting of the blue laws (sunday shopping not allowed) in that area of Bergen County; the second train tunnel NJ Transit/Amtrak will build under the Hudson River into Penn Station; The extension the Light Rail.

As a resident of northern NJ, it will probably will kick the pants off Garden State Plaza

8/23/2006 07:20:00 AM  
Anonymous Anonymous said...

He got it on the cheap, wait till
you see how the NJ taxpayer will
take it in the shorts.

Mills is out., these guys are smart,and will use as much of the
publics money as they can to achieve
the return on capital.

watch for the details,

8/23/2006 07:38:00 AM  
Blogger grim said...

If Xanadu turns into Atlantic City North, Barrack is going to come out as the "real estate investor of the century".

This was a small price to pay for what could possibly turn out to be the most profitable gambling venue in the world.


8/23/2006 08:06:00 AM  
Blogger grim said...

New investor gives hope to Xanadu

Gambling in future?

Irwin Horowitz, chief counsel for Hartz Mountain Industries, which submitted a losing bid to develop the site, suggested Colony may hope to benefit if the state someday permits video lottery terminals in the Meadowlands.

"Their track record is not in shopping centers; it's gambling," Horowitz said. "They've never built anything like this."

Colony bought the Resorts Atlantic City in 2001 and the Atlantic City Hilton in 2004. Later that year, company founder Thomas J. Barrack Jr. told quarterly newsletter Hotels Investment Outlook that he is bullish about Atlantic City in spite of the pending arrival of slot machines at Pennsylvania racetracks.

"Those slots will educate people about gambling and make them more likely to want to try the Atlantic City experience," Barrack said.

Colony, which said in a statement it is looking forward to the retail and entertainment project, would not comment Tuesday on possible VLTs in the Meadowlands.

In the Xanadu developer's agreement signed in 2003, a hotel can be built at The Meadowlands Racetrack "only in the event that video lottery terminals are installed" at the track. Xanadu developers would have the right of first refusal to build the hotel if VLTs are approved.

State Sen. Paul Sarlo, D-Wood-Ridge, said he was unsure if Colony's role at Xanadu would boost the chances of Meadowlands VLTs.

"This is a company that understands the importance of gaming as an economic boost for the state," Sarlo said.

8/23/2006 08:13:00 AM  
Anonymous Anonymous said...

dont forget goldman has the
final say on what goes on.

they are the lender of record
to mills.

they problably arranged the deal.

Remember the yankees deal with

yes is worth more than the yankees.

and its for sale.

Goldman is the led on the deal.

8/23/2006 10:47:00 AM  

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