Xanadu, the debacle:

Okay, that joke was too easy. But, 30 years after the Olivia Newton-John Xanadu debacle, there’s another one by the same name on the happenin’ shores of East Rutherford, New Jersey, this one in commercial real-estate form:

As the developer of the long-delayed Xanadu project in New Jersey struggles to line up new financiers and partners, advisers to the state’s new governor have floated another possibility if the $2 billion project can’t get its act together: Surrender it back to the state.

Since taking office in January, Gov. Chris Christie has made it clear he plans to get tough with the whimsically named 2.3-million-square-foot complex that was supposed to open in November 2008, complete with an 800-foot indoor ski slope and the largest Ferris wheel in North America. A report prepared for his transition team labeled Xanadu’s business model a failure and recommended the state, which owns the land, “needs to engage the owners…to either complete and open, or surrender the property.”

Part of the fail is due to the fact that $500 mil of the $2 bil needed to develop the project in question had been extended by the fine financiers at Lehman Brothers, who obviously knew a sweet deal on a Ferris wheel when they saw one, but which, you may recall, went bankrupt. And right now, finding new capital that wants to own a 1/4 share of a mall in New Jersey is challenging. It also has problems with location, location, location:

“I always thought it was a crazy idea,” says Carlos Rodrigues, the New Jersey director for the Regional Plan Association. “We don’t advocate free-standing destinations that are not part of the larger community.” He said the development would be difficult to access without a car and that northern New Jersey is already saturated with stores.

Yeah, in retrospect, the Xanadu development kinda looks like a Xana-don’t. I mean, even the Jersey Shore cast has bailed out on Jersey and will be filming in Miami next year, so you can’t count on Pauly D and the Situation taking a trip up to Xanadu when they need new threads and the “Tanning” part of their GTL. But… a half-finished mall is of use to absolutely no one, and as we’ve learned from the bailouts, when private capital steps out, the government steps in. New Jersey’s Governor Chris Christie is apparently mulling taking custody of Xanadu in the event all private investment boards the failboat. Will it end up a ward of the state? Who knows. The development transition team professes to have about 70% of the unfinished complex rented to companies like Legoland and Cabelas, though there’s a clause that allows the tenants to bail in case of fail. But we hope it works out. If there aren’t any mall record stores, Sonny Malone won’t have anyone to buy his album-cover paintings!