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Giants Take Legal Action to Stop Sports Authority's Xanadu Construction

By RICHARD SANDOMIR

Published: April 6, 2005

The New York Giants, angry that construction began last month on the $1.3 billion Meadowlands Xanadu project without their approval, went to court yesterday to halt the work and to enforce a clause in their lease that requires the state to renovate Giants Stadium into a modern, state-of-the-art facility.

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"We needed to take action to protect our home," said John Mara, the football team's executive vice president, whose family owns 50 percent of the Giants. The Tisch family owns the other half.

Mr. Mara said at a news conference that the New Jersey Sports and Exposition Authority "blatantly disregarded our rights under the lease" by giving developers permission to start building Xanadu, a family entertainment and sports complex that is to include an indoor ski slope, indoor surfing, a Formula One racetrack and office towers.

The area near the Continental Arena has become a construction zone. Sixty pilings have been driven into the parking lot for a garage, and eight acres of wetlands east of the arena have been dredged.

The Giants' lawsuit, filed in Bergen County Superior Court, elevates the tension among the team, Acting Gov. Richard J. Codey and the sports authority. Last month, a deal for the Giants to privately finance a new $700 million stadium collapsed when Mr. Codey added two late conditions - that the team waive its 30-day negotiating window and sign off on the Xanadu deal immediately, and his refusal to rule out that the state could impose a tax on revenue-generating activities at the new stadium.

The next day, the sports authority sued the Giants, also in the Bergen County court, to clarify the clause that refers to a state-of-the-art facility, which it argued was not its financial obligation alone, as the team insists, but one that it shares with the team.

The two lawsuits are expected to be consolidated.

"I welcome the Giants' lawsuit," George Zoffinger, the sports authority's president, said by telephone. "Now an independent third party will settle once and for all the state-of-the-art issue."

Mr. Zoffinger disputed the team's claims that the stadium was in decline or that the 24,000 surface parking spaces that the Giants are entitled to would be cut by construction.

Kelley Heck, a spokeswoman for Governor Codey, said: "I don't think the action today was unexpected. The governor remains optimistic that we can reach a deal with the Giants that will be good for the people of New Jersey. Hopefully, there will be a time when the Giants and Xanadu will reach agreement as well."

Mr. Mara said an agreement on traffic and parking issues with Xanadu's developers, the Mills Corporation and Mack-Cali, was contingent on a deal. In the Giants' lawsuit, the team said the sports authority sent it a letter on March 22 "purportedly seeking" its consent, one day after construction began.

The chairman of the sports authority, Carl J. Goldberg, disputed that the Giants could block the Xanadu construction. "We don't believe the lease gives them sign-off on Xanadu, per se," he said in an interview. "We don't share their opinion."

The Giants cited two sections of the lease to buttress their right to block Xanadu if construction caused traffic problems or reduced the number of parking spaces for football fans on game days. It cited recent statements from Mr. Codey in which he acknowledged the Giants' ability to halt the project.

A spokesman for Xanadu, Bob Sommer, said that the project was "delivering on its promise of 20,000 jobs," and that the Giants' lawsuit was a "shot across the bows" of the families who are benefiting now that construction has begun.

Mr. Mara said the team's goal was to stay in New Jersey and build a stadium with its own money, but he admitted that the delay caused by the collapsed deal would cause the stadium's cost to rise to $750 million. If the Giants cannot build their own stadium, they want a court to enforce the obligation of the sports authority to finance hundreds of millions of dollars in renovations.

"I don't see any scenario where the court will say it's a shared obligation," Mr. Mara said.

Mr. Zoffinger said the sports authority would comply with the court's ruling.

Mr. Mara said the actions of Mr. Codey and the sports authority "are pushing us in the direction" of Manhattan, where last week the Metropolitan Transportation Authority board unanimously granted the Jets approval to build a $2 billion stadium above the railroad yards on the West Side of Manhattan.

"That's not something we want to do," Mr. Mara said, reaffirming that unlike the Jets, the Devils and the Nets, his family and the Tisch family want their team to stay in the Meadowlands. The Devils plan to move to Newark, and the Nets are expected to move to Brooklyn.

All those teams will be playing in new buildings, which is what the Giants want after nearly 30 years in Giants Stadium. Mr. Zoffinger insisted that the stadium was up to modern standards, and that the sports authority would continue to make improvements in a "reasonable and periodic way," as the lease requires.

But Mr. Mara said in a subsequent phone interview that "no one would argue it's state of the art; maybe he's comparing it to Shea Stadium or Randalls Island."

His lawsuit cites areas that make Giants Stadium substandard - from the low number of luxury boxes (some without bathrooms) and club seats to the size of video screens and the narrowness of its concourses.

Mr. Goldberg, of the exposition authority, argued, though, that the team was "cloaking their pleadings as something that they're doing for their fans, but fans are not interested in the Giants' ability to install more luxury suites and club seats."

 

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