Bonds News

NJ Xanadu project cites lender default for delay

NEW YORK, March 20 (Reuters) - New Jersey’s Xanadu project, a billion-dollar shopping and entertainment complex located just west of New York City in the Meadowlands, has been delayed again, this time due to a lender’s default, a spokesman said on Friday.

“We are contemplating a new opening date beyond August 2009 and we have asked our contractors to refocus their work in line with that goal,” said Tim White, a spokesman for the project, in a statement. Xanadu was supposed to open in 2007.

One factor now delaying construction “is a default by one of our lenders,” White said, explaining a non-bankrupt Lehman Brothers affiliate called Xanadu Mezz Holdings LLC had “refused to fund its share of our construction loans.”

A Lehman spokesman was not immediately available.

Democratic State Senate President Richard Codey of Essex, who has long criticized troubled development, said: “This project has obviously turned into ‘The Mistake at the Meadowlands.’” He urged Xanadu’s managers to determine whether it was feasible to even finish it.

White said the default could put tens of thousands of jobs, as much as $1 billion in annual sales, and $200 million in tax revenues at risk. “We are taking all possible steps to get the lender to fulfill its obligations,” he added. (Reporting by Joan Gralla; Editing by Diane Craft)