New Jersey’s American Dream Mall Misses Bond Payment

New Jersey’s American Dream mall might be heading back into the woods after its owner missed an interest payment this month on municipal bonds tied to its financing, according to a securities filing this week from trustee U.S. Bank.

The bonds, backed by the New Jersey Economic Development Authority (NJEDA), account for $287 million of the roughly $1.1 billion in debt tied to financing of the mall, according to Bloomberg, which first reported the news.

Spokespeople for American Dream, NJEDA, U.S. Bank and mall owner Triple Five Group did not immediately respond to requests for comment.

The news of the missed payment comes after American Dream finally started paying back bondholders in August after U.S. Bank, the trustee on the debt, missed two years of interest payments for the $287 million in bonds, as Commercial Observer previously reported.

U.S. Bank returned approximately $25.7 million to bondholders in September as part of the required $46.4 million in past-due interest before paying the down principal, CO reported.

Triple Five had borrowed a total of about $1.1 billion in municipal bonds to provide financing for the $5 billion American Dream mall project, a massive retail and entertainment complex that spans more than 3.1 million square feet. American Dream opened in East Rutherford, N.J., in October 2019 after decades of delays.

After opening, the mall was hit with a series of financial issues including $3 billion in debt after missed bond payments, headlines of fires and accidents, and losses of $245 million.

Things seemed to be on the upswing for the project toward the end of last year thanks to increased foot traffic, strong leasing and consistent retail sales at the property, as CO previously reported.

The next interest payment on the bonds on the mall is due Aug. 1, Bloomberg reported.

Isabelle Durso can be reached at idurso@commercialobserver.com.