American Dream NJ mall passes deadline for $290 million debt payment

Developers of the American Dream mega-mall and entertainment complex have missed an August 1 deadline for payments on $290 million of debt used to fund the mall – the latest signs of financial stress for the Meadowlands project.

According to a notice to bondholders by US Bank Trust Co., Canadian promoter Triple Five has missed an $8.8 million semi-annual interest payment to bondholders. It is not immediately clear if he will have a grace period as was the case when he missed a similar payment in June. Bloomberg News was first to report on the mall’s missed payment.

The missed payment marks the latest financial woe for the $5 billion, 3 million square foot site since it opened in 2019 and the setbacks that followed the coronavirus shutdowns.

“The mall is definitely in trouble – there’s no doubt about it in my mind,” Jeffrey Lahullier, mayor of the mall’s hometown of East Rutherford, said in a June interview. “I don’t think they can make ends meet.”

American Dream reported $60 million in losses last year amid the pandemic and disputes $9 million that several nearby municipalities say the mall owes them.

Mall officials expected 40 million annual visitors as they opened attractions like a 300-foot Ferris wheel, indoor ski slope, skating rink, amusement park and water park — all amenities that, according to Triple Five, separate it from traditional malls and will help the facility overcome the challenges facing brick-and-mortar retail.

Monday’s missed payment does not necessarily mean the mall is now in default, according to the notice.

Take a look inside:New Food Hall at the American Dream Mall debuts

For subscribers:American Dream has withheld millions, Meadowlands mayors say. What your city says it’s due

The debt crisis is being supported by $390 million in grants from the New Jersey Economic Development Authority based on sales tax collections, according to Bloomberg. The NJEDA has not approved Triple Five’s documents needed to release those payments, Bloomberg reported.

“There is no money to give away,” said Secaucus Mayor Michael Gonnelli, which borders East Rutherford.

The mall’s financing package also includes $800 million in municipal debt secured by payments in lieu of property taxes. And it includes a $1.7 billion construction loan in 2017 that required Triple Five to acquire a 49% stake in its other two major properties – Mall of America in Minnesota and Edmonton Mall in Alberta, Canada.

“We have no financial obligation to make any payments to bondholders,” American Dream spokeswoman Melissa Howard said in an email on Tuesday.

“We have made all the necessary submissions to NJEDA. Sales tax revenue is generated by the project and paid to the state and we believe the state has earmarked funds in the budget to make payments to bondholders.

The mall declined several follow-up questions, while NJEDA and Governor Phil Murphy’s office could not immediately be reached for comment. US Bank declined to comment.

Daniel Munoz covers business, consumer affairs, labor and the economy for and The Record.

E-mail: [email protected]; Twitter:@danielmunoz100

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