American Dream Mall Begins to Pay Back Years of Debt
By Isabelle Durso August 28, 2024 12:15 pm
reprints
New Jersey’s American Dream mall might finally be getting out of the swamps.
After two years of missing interest payments for $287 million in municipal bonds issued for the megamall’s construction, American Dream will begin to pay bondholders back next week, Bloomberg first reported.
U.S. Bank, the trustee on the debt, had skipped payments since August 2022 due to issues with the necessary documentation needed to allocate the funds and must pay back $46.4 million in past-due interest before paying down the principal, according to a filing last week.
The bank is expected to return approximately $25.7 million to bondholders on Sept. 3, the filing said. The bonds were initially backed by grants from the New Jersey Economic Development Authority (NJEDA).
Spokespeople for American Dream, NJEDA, U.S. Bank and mall owner Triple Five Group did not immediately respond to requests for comment.
In total, Triple Five borrowed about $1.1 billion in municipal bonds to provide financing for the $5 billion American Dream project, Bloomberg reported.
The more than 3.1-million-square-foot American Dream shopping and entertainment complex opened in East Rutherford, N.J., in October 2019 after nearly two decades of development, three developers and millions of dollars in tax breaks from former New Jersey Gov. Chris Christie. But the mall was quickly forced to close its doors in 2020 when COVID-19 hit.
While the megamall managed to reopen in October 2020 and saw a steady increase in shoppers, its financial woes and missed bond payments accumulated to a total of $3 billion in debt as Triple Five struggled to pay back construction loans, as Commercial Observer previously reported.
Triple Five previously used debt-service reserves to pay back bondholders for payments up to February 2022, but that left its bank account drained to a modest $862, CO reported.
In addition to a litany of financial issues, the mall seems to just have bad luck. In September 2021, American Dream’s indoor ski slope was hit by a fire and forced to close. And last year, a helicopter hanging from the ceiling of the mall’s indoor water park fell down and injured guests, NorthJersey.com reported.
By September 2023, the mall’s losses had quadrupled in just one year from $60 million to $245 million, the outlet reported. But now, things may slowly be looking up for American Dream as bondholders receive their overdue interest next week. Plus, retail sales in the property have been looking better recently.
The mall raked in around $149 million in sales in the second quarter, a 12 percent jump year-over-year, while the first quarter also saw a 30 percent boost year-over-year, Bloomberg reported.
American Dream sits just west of Interstate 95 near the Meadowlands Sports Complex, which includes MetLife Stadium. Attractions at the mall include a DreamWorks Water Park, Nickelodeon Universe, Sea Life Aquarium and Legoland Discovery Center.
Isabelle Durso can be reached at idurso@commercialobserver.com.
