TRENTON – The saga of the sprawling, multimillion-dollar, retail/entertainment project known nowadays as American Dream took a big step forward Thursday when the state Local Finance Board approved one aspect of its financing proposal.
The board OK’d a plan for $550 million in tax-exempt bonding for the 2.6 million-square-foot Bergen County project. The arrangement is designed to prevent taxpayers in East Rutherford from being left on the hook if the project does not succeed.
With the finance board review complete, the project is scheduled to go before the state Economic Development Authority on Friday for approval of a state incentive grant.
The development, a $2.58 billion undertaking, involves private financing as well. The project – subject of much controversy and criticism years ago when it was known as Xanadu and in the hands of a different developer – is scheduled to proceed to closing in the first quarter of next year.
Right now it’s an unfinished complex near the Met Life Stadium. Christie once referred to Xanadu as the “ugliest damn building” in New Jersey.
But its current backers – Ameream LLC and Meadow Amusement LLC – told the Finance Board that when it is completed, American Dream will have generated more than 36,000 full- or part-time, off- and on-site jobs.
The project is not without critics to this day who say it will harm lands already prone to flooding, damage the economies of towns in the region such as Jersey City and Elizabeth, and contribute to what already is massive traffic congestion.
The two NFL teams that call MetLife home – the Giants and Jets – have gone to court precisely over their fears of what traffic will be like on game days.
But as Finance Board Chairman Tom Neff said today, the scope of their review was narrow, confined to the scrutiny of the proposed bond sale and its effects on East Rutherford.
“The earlier vision, Xanadu, ended badly and the site is underutilized,” Neff said as he emphasized the Finance Board does not issue zoning approvals nor does it weigh in on what EDA or the Sports and Exposition Authority should do. “We are not stepping in their shoes.’’
Neff pointed out that according to EDA, the state will see $1 billion in various tax revenues, employment will receive a huge boost, and there are significant mass transit approaches to mitigate traffic.
East Rutherford Mayor James Cassella said under this new proposal the borough will benefit in ways it would have suffered under the previous incarnation.
Among other things, the town will realize $1 million in sewer connection fees at closing with more expected in later years, $21 million will be guaranteed to the town at closing regardless of whether the place opens, and the town will be free of other obligations to provide services to the business.
“East Rutherford is doing the right thing in protecting taxpayers and in not putting its credit on the line,’’ Neff said. “At the end of the day, the taxpayers are not on the hook.’’
But critics see other problems.
Jeff Tittel of the Sierra Club told the Finance Board that while he acknowledged that people were trying to do the best job possible, “should government be in the business of financing a project like this no matter how you try to protect the public and taxpayers?
“If this was such a good proposal in the first place you wouldn’t need to go to such extraordinary lengths to finance it.”
He said it would be the “biggest greenhouse gas producer’’ in the state outside of a refinery.