Virtual Jersey: Was Xanadu venture a mistake?

The Record
February 5, 2010

THE RECORD: Let’s talk about the Meadowlands. It is sinking in debt. Governor Christie is putting together a commission on this subject. You were part of the transition team, were you not, Mike?

DuHAIME: I was. As we look at the Sports and Exposition Authority, I think we have to look at it in today’s financial realities. The reality is, right now, it is losing money and therefore heavily subsidized by the taxpayers. Just because it was great in its former self does not mean that it should continue to essentially hemorrhage money, which it’s doing right now at the expense of the taxpayer. This is not a problem that needs to be tweaked; it is losing tens of millions of taxpayer dollars every year.

Did Democrats create some of this problem? A lot of people look at Xanadu and think of Jim McGreevey. Jamie, you were part of that administration. Was Xanadu doomed from the beginning?

FOX: No, it’s a $2 billion project that is now short because of the downturn in the economy of approximately $500, $600 million, and I believe that at the end of the day, and there are no taxpayer dollars involved in that, they will have additional investors to finish that project, which will result in thousands of jobs. I think that because there is a financial difficulty with the $2 billion project, does not mean that it was not a good thing to do and I believe it can be saved and move forward and be completed.

THE RECORD: It had financial problems before the recession hit. Will a casino be the only way to save something like this?

FOX: I think we need to be very careful when we talk about gaming at the Meadowlands. One, I think there’s probably a very serious constitutional question that has to be addressed, and then if you do that, you can destroy Atlantic City, which is also in dire financial economic crisis today.

I read through the transition team report, and I could hear the NASCAR cars going around where the racetrack is there.

DuHAIME: The transition reports are multiple reports that touched on the Meadowlands and racing. Horseracing is losing money. In terms of looking at the solutions, we have to have everything on the table. There is going to be no shortage of opinions. I applaud the fact that the commission [was] created. I applaud the fact that the Legislature is looking into this as well. The Sports and Exposition Authority needs to change.

Did Democrats give away too much of the store at the Meadowlands?

FOX: When I left government, the Sports Authority had an $11 million surplus, which was the first time in many years there was a surplus. So, there are Democrats who have surpluses and there are Democrats who had deficits.

People say the same thing about Christie Whitman. The pension fund was not underfunded when she was doing her cuts, the problems came from the point that DiFrancesco and several administrations afterwards came. Xanadu is seen as something that came out of the McGreevey administration.

FOX: Yes, it did; $2 billion of private-sector money.

But if it defaults who’s going to end up with that bill?

FOX: There’s no taxpayer money in Xanadu. And if it defaults, the people who invested in it — which is the private sector — will lose money.

But it’s still on state land. Somebody’s going to be stuck with a rusting hulk, yes?

FOX: Yeah, that’s true … I do believe that there will be investors and this will be completed and the turnaround in the economy will actually make this a success. I don’t think it’s as dire as you’re saying.

DuHAIME: The issue here with Xanadu and everybody else is that we have major problems here. They need to be fixed. Xanadu looks like a major problem. And at some point, if it doesn’t get fixed it is going to be taxpayers that are footing the bill in some way or another. I think the entire reexamination of the Exposition Authority is a good thing to be done.

THE RECORD: Let’s talk about the Meadowlands. It is sinking in debt. Governor Christie is putting together a commission on this subject. You were part of the transition team, were you not, Mike?

DuHAIME: I was. As we look at the Sports and Exposition Authority, I think we have to look at it in today’s financial realities. The reality is, right now, it is losing money and therefore heavily subsidized by the taxpayers. Just because it was great in its former self does not mean that it should continue to essentially hemorrhage money, which it’s doing right now at the expense of the taxpayer. This is not a problem that needs to be tweaked; it is losing tens of millions of taxpayer dollars every year.

Did Democrats create some of this problem? A lot of people look at Xanadu and think of Jim McGreevey. Jamie, you were part of that administration. Was Xanadu doomed from the beginning?

FOX: No, it’s a $2 billion project that is now short because of the downturn in the economy of approximately $500, $600 million, and I believe that at the end of the day, and there are no taxpayer dollars involved in that, they will have additional investors to finish that project, which will result in thousands of jobs. I think that because there is a financial difficulty with the $2 billion project, does not mean that it was not a good thing to do and I believe it can be saved and move forward and be completed.

THE RECORD: It had financial problems before the recession hit. Will a casino be the only way to save something like this?

FOX: I think we need to be very careful when we talk about gaming at the Meadowlands. One, I think there’s probably a very serious constitutional question that has to be addressed, and then if you do that, you can destroy Atlantic City, which is also in dire financial economic crisis today.

I read through the transition team report, and I could hear the NASCAR cars going around where the racetrack is there.

DuHAIME: The transition reports are multiple reports that touched on the Meadowlands and racing. Horseracing is losing money. In terms of looking at the solutions, we have to have everything on the table. There is going to be no shortage of opinions. I applaud the fact that the commission [was] created. I applaud the fact that the Legislature is looking into this as well. The Sports and Exposition Authority needs to change.

Did Democrats give away too much of the store at the Meadowlands?

FOX: When I left government, the Sports Authority had an $11 million surplus, which was the first time in many years there was a surplus. So, there are Democrats who have surpluses and there are Democrats who had deficits.

People say the same thing about Christie Whitman. The pension fund was not underfunded when she was doing her cuts, the problems came from the point that DiFrancesco and several administrations afterwards came. Xanadu is seen as something that came out of the McGreevey administration.

FOX: Yes, it did; $2 billion of private-sector money.

But if it defaults who’s going to end up with that bill?

FOX: There’s no taxpayer money in Xanadu. And if it defaults, the people who invested in it — which is the private sector — will lose money.

But it’s still on state land. Somebody’s going to be stuck with a rusting hulk, yes?

FOX: Yeah, that’s true … I do believe that there will be investors and this will be completed and the turnaround in the economy will actually make this a success. I don’t think it’s as dire as you’re saying.

DuHAIME: The issue here with Xanadu and everybody else is that we have major problems here. They need to be fixed. Xanadu looks like a major problem. And at some point, if it doesn’t get fixed it is going to be taxpayers that are footing the bill in some way or another. I think the entire reexamination of the Exposition Authority is a good thing to be done.