The Last Shopping Mall? New Jersey Awaits Xanadu.It rises out of the tidal murk of the Meadowlands — the polluted northern–New Jersey wetlands on which the sports complex of the same name was built some 33 years ago — like a garish species from a monster movie. What is that swamp thing? It's a mishmash of big-box structures covered in aqua, blue and white tiles, with a little mustard yellow and brown thrown in to finish off the 1970s-nightmare look. Part of the complex, still under construction, is shaped like a ski jump, because what says industrial metropolitan America quite like a Nordic sport?
"Looks like bathroom tile from the 1970s," one astute commenter wrote on nj.com, a website that covers New Jersey news. "I expect to see David Cassidy every time I drive by that thing because it looks like the Partridge Family bus!" wrote another. Are the construction workers wearing bell-bottoms? The commenter continued, "My ex-husband flew in from Florida and said, 'That mall can be seen from space.' "
Yes, that thing is a mall called Xanadu, located in East Rutherford. The name is a nod to the heavenly summer home immortalized by English poet Samuel Taylor Coleridge: "In Xanadu did Kubla Khan/ A stately pleasure-dome decree." It's also the name of a ridiculous 1980 Olivia Newton-John movie involving roller-skating muses and disco. Slated to open in August, Xanadu, a wannabe shopping paradise, will be a 2.4 million-sq.-ft. retail and entertainment complex located 3½ miles from the Empire State Building, across the Hudson River at the intersection of the New Jersey Turnpike and two heavily trafficked state roads through which 88 million vehicles pass each year.
Across the state, the project has taken a rightful beating for its exterior. The Meadowlands location isn't scenic — it's surrounded by weedy wetlands, decrepit factories, shipping containers and railroads — and Xanadu's developers spent $2 billion on what seems like the most hideous spot on the lot. "It's basically a lot of junk," says former New Jersey Governor Brendan Byrne, for whom the basketball area at the Meadowlands was once named (it's now the Izod Center). "I drive by with friends and we're embarrassed."
You've got to give the developers some credit for their tenaciousness. But this massive project, the most expensive shopping mall ever built in the U.S., has a more serious problem than its tacky exterior: the doors will open smack in the middle of the worst recession since the Great Depression. Malls are suffering a slow, painful death. The International Council of Shopping Centers (ICSC) has predicted that 73,000 stores will close their doors during the first half of 2009. Retail expert Burt Flickinger III, managing director of Strategic Resources Group, projects that 2,000 to 3,000 shopping malls and centers nationwide could go under this year. If Xanadu — which allegedly has leased 73% of its space thus far — does open in 2009, it would be the only enclosed mall to debut this year, according to the ICSC. Xanadu is the lone ranger, running straight into every possible horrible economic headwind. "It's the poster child for bad timing," says Howard Davidowitz, chairman of Davidowitz & Associates, a national retail-investment-banking and consulting firm.
What's worse, according to Xanadu's detractors, is that the mall will offer discretionary amenities at a time when consumers are in survival mode. For example, that ski jump structure will actually house a 165,000 sq. ft. indoor skiing and snowboarding facility. The mall will also include restaurants like the Cheesecake Factory, whose 2008 profits dropped nearly 30% amid the casual-dining meltdown; an 18-screen movie theater; fashion retailers such as H&M, Guess and Zara; and Cabela's, an upmarket fishing, hunting, outdoor apparel and equipment outlet. Adrenalia, an extreme-sports store, is slated to have an indoor wave pool, and the mall includes a skydiving simulator. Xanadu will also offer rides on a 286-ft. Ferris wheel that is sponsored by Pepsi. The wheel will provide stunning views of the Manhattan skyline — as well as the north Jersey highways, toll booths, weeds, containers, smokestacks and steel bridges you see in the opening credits of The Sopranos.
"Xanadu is the epic discretionary story," says Davidowitz. "It's the epicenter of 'not needed.' How can you have this when the consumer is completely decimated? It's already one of the world's biggest nightmares."
Naturally, executives for Xanadu, which has been beset by prior delays and cost overruns, offer a different spin. "It's not like people aren't looking to recreate," says Larry Siegel, president of Xanadu. "They are. But people may not be able to rent that house on the beach or pay a few hundred bucks for a three-day pass at Disney. But they can come here and spend $100. If people spend the time here, they're going to spend the money."
Although Xanadu doesn't have a pretty face, it's what's inside that counts for a mall. And if Xanadu can corral enough retailers to sign on for a grand opening, it has the potential to at least survive the downturn. If all goes according to plan, the mall could spice up the shopping experience, which would be a welcome change in this depressed retail environment. For example, a huge video screen in the sports area will broadcast games, which could draw shopping-averse men to the mall. The Children's Science Center, Legoland Discovery Center and Wannado City — where kids can hold "jobs" as firefighters, cops and other professionals — may give families incentive to leave the house, head for the mall and maybe buy a shirt or two while they're there.
Another advantage: the huge, diverse New York City metro area hasn't been hit quite as hard by the recession as the rest of the country has. Housing prices are dipping, but not collapsing like in other places. New York malls have held up relatively well. Xanadu's location, amid the confluence of some of the country's most congested road arteries, should also help. Surely a few curious drivers will want to check out the mega-mall. Plus, the state has built a rail line to the site; it's now just a 23-min. ride to Xanadu from Manhattan. Traditionally, city residents without cars cringe at the thought of crossing the Hudson to the Meadowlands, since public transportation to the site has been so abysmal.
Xanadu's president insists the mall is the real deal. "For people driving by who don't like how the front of it looks, please, give yourself a chance to understand the whole package," Siegel says. That would be a reasonable request from any mall developer. Unfortunately, it was reasonable back in 2006. Forget about paradise, Xanadu. Just try to stay out of hell.
Original Source : http://www.time.com/time/business/article/0,8599,1883546,00.html?imw=Y
