Senate Republican Whip Kevin O’Toole expressed frustration at reports in the Star-Ledger that the huge Xanadu building is “eerily empty” of workers because financing of the long-delayed, $2 billion project has fallen through yet again. He also called for legislative hearings on the Xanadu project.
“Whenever anyone questioned the Corzine administration’s shaky management of Xanadu, the response has been for the governor to praise the project because it’s creating jobs,” O’Toole said. “If published accounts are correct, almost no one now is working on Xanadu at a time when New Jersey desperately needs the work.”
The Xanadu project is reportedly at a standstill because a subsidiary of the now-bankrupt Lehman Brothers investment bank failed to advance $11.2 million. The developer called that relatively small sum “critical” to completing the multi-billion-dollar project. O’Toole said the gap in financing is inexcusable, given that Governor Corzine orchestrated a $1.5 billion Xanadu bailout in 2006. The New Jersey Sports and Exposition Authority is supposed to oversee the project, yet the authority’s chairman reportedly said that he had no idea that a court had ruled that the Lehman subsidiary didn’t have to supply the needed funding.
“The authority simply can’t be this out of touch with what’s happening with a $2 billion project already plagued by delays and financial shenanigans by Wall Street firms. Lehman collapsed more than a year ago. The commission and the Corzine administration knew or should have known that the Lehman financing was in peril. Through its close ties to Xanadu officials, the Corzine administration should have made sure new financing was found long ago, so critically needed work could continue uninterrupted.”
Then-economic development chief, Gary D. Rose, a colleague of Corzine’s while they were executives at Goldman Sachs, arranged the 2006 bailout. Daniel Neidich, another former Goldman colleague of the governor’s, was a partner in the investment consortium that took over the project, which has been in the works for more than six years.
“The governor knew who to call to prevent costly delays and job losses,” O’Toole said. “We need legislative hearings into the Xanadu project to find why these Wall Street bankers can’t seem to complete a project that is costing New Jersey millions of dollars.”
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June 30, 2011
