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Hersh sees great potential in Jets' New Jersey move

Real Estate Weekly, August 24, 2005 by Daniel Geiger

Upon recent news that the Jets and Giants may strike a deal for a massive new stadium that would house both teams, one of the developers of a neighboring sports themed mall and entertainment center called Meadowlands Xanadu is hopeful that the two venues will now be able to share synergism rather than antagonism.

"The Jets are entrepreneurial and they think that there can be tremendous connectivity between what they are likely to do with the Giants and what we're doing," said Mitchell Hersh, president of real estate investment trust Mack-Cali, who along with The Mills Corporation is developing Xanadu.

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Hersh's optimism stands in stark contrast to statements he made in April concerning the Giants, when the team slapped Xanadu with a lawsuit seeking an injunction on construction. The Giants claimed that Xanadu, a $1.3 billion complex currently being erected in the direct vicinity of the Continental Airlines Arena, had consumed some of its 24,000 parking spaces in violation of the team's rights under its lease and that the mall's traffic flow will create heavy congestion on game days.

Hersh condemned the suit at the time, calling it a way for the Giants to exert pressure on New Jersey to meet the team's demands for exemption from a tax on luxury seating. That dispute between the Giants and the state helped scuttle initial negotiations for a new stadium at the start of the year.

The Giants eventually managed to negotiate a deal in April with the state for a new $750 million stadium to be funded exclusively by the Giants and built adjacent to their current facility in East Rutherford, New Jersey. Gaining clearance for a stadium didn't seem to soften the team's position towards Xanadu. Although a preliminary hearing in recent weeks for the Giants' trial case refused to grant an injunction on the construction of a neighboring project, Giants' spokesman Patrick Hanlon said that the team will go to trial against the development.

"We're still in discussions with them and things are not yet resolved," Hanlon said. "We will go to court to seek enforcement of the article in our lease that essentially gives us exclusivity in the Meadowlands complex on game days."

Hersh felt that the preliminary hearing's decision to let Xanadu's construction continue was a strong sign that further court decisions would continue to be in Xanadu's favor.

"The Giants lost a very fundamental part of their case when they tried to get injunctive relief a few weeks ago and I think that speaks quite a bit to how the court views their argument," Hersh said.

The possibility of having the Jets develop a stadium in partnership with the Giants could potentially prompt the football teams and Xanadu to embrace a goal of connectivity and some form of harmony. Suffering bitter defeat of its plans for a stadium on Manhattan's West Side, the Jets reportedly have privately unveiled plans for a 90,000-seat stadium whose exterior elements would better interact with Xanadu.

"This is all preliminary and conceptual, I don't think there would be alternation to Xanadu but there might be a collaborative effort in terms of establishing an appropriate link between the stadium and Xanadu that relates to the train station and some of the transportation," Hersh said.

Hanlon admitted that a rail link being constructed by the state and providing access to Xanadu would also benefit the Giants.

The connection between the venues could consist of more than just shared transportation infrastructure however. Hersh noted that the two projects would most likely attract a similar type of crowd, those interested in sports and entertainment, and therefore were valuable assets to one another, drawing together more visitors than either one would alone.

"I think that they see that Xanadu can bring an appropriate level of additional traffic to the Meadowlands, traffic in the positive sense, shoppers, people interested in taking advantage of the entertainment venues and the sporting venues and that interaction can work.very positively on a mutual basis," Hersh said.

Hersh also sees Xanadu's food services and large-scale fitness facilities as being valuable neighbors to the Giants and Jets and amenities that will eagerly be tapped by game attendees.

"I think that the teams are interested in amplifying some of the activities at the stadium to include some uses that relate to the theme of the sporting venues," he said.

Hinting at the current litigation, Hanlon would not comment on how the two developments may interact.

"We have a lot of bridges to cross," Hanlon said. "That's where we are. We have to figure out how we're going to function."

A spokesperson for the Jets declined comment.

Business Services Industry

Hersh sees great potential in Jets' New Jersey move

Real Estate Weekly, August 24, 2005 by Daniel Geiger

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