The developers behind the American Dream megamall and entertainment complex missed an Aug. 1 deadline for payments on $290 million of debt used to finance the mall — the latest signs of financial stress for the Meadowlands project.
According to a notice to bondholders by U.S. Bank Trust Co., Canadian developer Triple Five missed an $8.8 million semi-annual interest payment to bondholders. It is not immediately clear if it will have a grace period as was the case when it missed a similar payment in June. Bloomberg News was the 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 its 2019 opening and ensuing setbacks from the coronavirus closures.
“The mall’s definitely in trouble — there’s no doubt 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.”
Mall officials expected 40 million annual visitors as they opened up attractions like a 300-foot Ferris wheel, indoor ski slope, ice-skating rink, an amusement park and water park — all amenities that Triple Five says 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.
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The bout of debt is backed by $390 million of 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’s no money to give,” said Secaucus Mayor Michael Gonnelli, which borders East Rutherford.
The mall’s package of financing also includes $800 million of municipal debt backed by payments in lieu of property taxes. And it includes a $1.7 billion construction loan 2017 that required Triple Five to put up a 49% stake in its two other major properties — Mall of America in Minnesota and Edmonton Mall in Alberta, Canada.
“We have no financial obligation to make any payments to the bondholders,” American Dream spokesperson Melissa Howard said in an email Tuesday.
“We have made all necessary submissions to the NJEDA. Sales tax revenues are being generated from the project and paid to the state and we believe the state has appropriated funds in the budget to make bondholder payments.”
The mall declined several follow-up questions, while the NJEDA and Gov. Phil Murphy’s office could not be immediately reached for comment. U.S. Bank declined to comment.
Daniel Munoz covers business, consumer affairs, labor and the economy for NorthJersey.com and The Record.