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With the Giants Mentioning Manhattan, New Jersey Takes Stadium Dispute to Court
By DAVID KOCIENIEWSKI

TRENTON, March 10 - With the New York Giants dangling the possibility of leaving New Jersey for the proposed West Side stadium in Manhattan, state officials went to court on Thursday to show that they will not allow the team to break its lease in the Meadowlands, which runs through 2026.

New Jersey officials and the Giants have negotiated for five months over a plan that would release team owners from the current lease and allow them to build and operate a $700 million stadium on the Meadowlands site. The two sides appeared to be near an agreement on Wednesday, but a team owner, Wellington Mara, said that two last-minute concessions sought by the state had undermined the deal and persuaded the Giants to consider leaving New Jersey altogether.

Acting Gov. Richard J. Codey tried to ratchet down the rhetoric Thursday morning, saying he hoped the two sides could still strike an agreement that would enable the team to build its stadium and remain in New Jersey. By midday, however, lawyers for the state filed papers in Bergen County Superior Court, saying the Giants' proposal for the new stadium was "onerous and unfair" to taxpayers and asking a judge to clarify the extent of improvements necessary to make the Giants' current stadium state of the art, as the lease requires.

Giants officials have said that to meet that standard, the state must make $300 million in improvements to build luxury boxes, club seats and other amenities. State officials say less than $100 million in renovations will be required. In its filing, the state asked the judge to clarify the meaning of "state of the art" and asserted that the team and the National Football League should pick up part of the cost of any renovations.

Coming at a time when the Jets are discussing a stadium on the West Side of Manhattan, it was unclear whether the breakdown in the talks was a sign of insurmountable differences or negotiating brinkmanship. Asked about the prospect of the Giants making their home at the proposed stadium in Manhattan, Mayor Michael R. Bloomberg said Thursday that he considered the team's interest another sign of the project's merit. But he stopped short of saying he considered the move likely.

"The public's interest, all of the sudden since the story was floated, shows you just how sports fans react - they would like to see lots of teams here," Mr. Bloomberg said. "But let's see how that plays out."

Joe Shenker, a lawyer for the Giants, said the team's owners would rather remain in New Jersey. But Mr. Shenker said the owners were shocked when, during the final hours of the negotiations, state officials refused to guarantee that there would be no special taxes imposed on stadium revenues in the future. The state also insisted that the team give its immediate approval to the Xanadu entertainment and retail complex to be built near the stadium. Giants officials worry that traffic from the complex might interfere with stadium traffic on game days, and in previous negotiations with the state had been promised a 30-day window during which to reach a separate agreement with the Xanadu owners.

Mr. Shenker said the team would now weigh all options.

Mr. Shenker declined to discuss the state's court action, saying he had not had time to study the legal papers.

The negotiations come at an important time for Mr. Codey, who has had to propose a harsh series of program cuts and tax increases to cope with a projected budget deficit.

In the State Legislature, some lawmakers are leery about the state cutting deals that will benefit wealthy sports team owners at a time when Mr. Codey has proposed eliminating popular property tax rebates.

Even at the New Jersey Sports and Exposition Authority, some board members said they believed that the current proposal benefits the Giants at the expense of taxpayers. The Giants would cover the cost of demolishing the existing Giants Stadium and building the new one, and the new stadium would relieve the state of the expense of renovating the existing stadium. But the state would agree to spend $30 million to extend sewer lines and make other infrastructure improvements.

And state records show that the $6.3 million rent the Giants would pay for the land beneath the new facility is $10 million less than New Jersey now receives annually from the operation of Giants Stadium.