EAST RUTHERFORD, N.J. (CBSNewYork) — A mega mall mired in two decades of delays is facing yet another setback.
First, the American Dream had to postpone its March opening of retail stores due to the coronavirus pandemic, and now the owners may be in trouble, CBS2’s Lisa Rozner reported Thursday.
Back in November, the Ghermezian family unveiled attractions at the Meadowlands‘ American Dream by riding its star rollercoaster. But the ups and downs continue for the family behind Triple Five Group, the owners of the 70-acre mall — equal to the size of 50-plus football fields.
Located right off Route 3 in East Rutherford, it was expected to draw visitors from New York City and beyond.
“Early signs here at American Dream in the Meadowlands was spectacular. Activity at the ice skating rink was three or four times that of their other facilities,” said Jim Kirkos, President and CEO of the Meadowlands Regional Chamber of Commerce.
It took 15 years of bankruptcies, lawsuits, and construction delays to finally — last fall — open the entertainment half of the property, which includes the world’s biggest indoor wave pool, an ice skating rink, and a year-round ski slope.
The other half — hundreds of retail stores — was scheduled to open in March, but coronavirus concerns postponed that.
Now, Wells Fargo has confirmed Triple Five missed the April and May payments on its $1.4 billion mortgage for its other mega property, the Mall of America in Minnesota.
That mall was used as collateral to fund the East Rutherford complex, which is seen as an economic engine for the region.
Kirkos said he still believes “the Dream” will come true. It was 90% leased. But with retailers nationwide struggling to pay rent, real estate experts say it’s likely tenants will drop out.
“Unless the landlords plan to reduce their rents 50%, there’s no way they can exist,” said James Famularo, president of Meridian Retail Leasing.
A spokesperson for the American Dream would only say that it is finalizing reopening plans. She would not comment on reports of financial troubles.
“Everyone involved is going to experience some of the pain,” said Rich Bockmann, a reporter for The Real Deal.
And that includes New Jersey taxpayers, who funded $1.2 billion of the $5-plus billion project. It’s the largest public subsidy in the state’s history, according to Ed McMahon of the Urban Land Institute.
“Even the state of New Jersey putting all their eggs in one basket, and when’s the last time they did that? With Atlantic City,” McMahon said.
“I really call it the ‘American Scheme’ mall,” added New Jersey Sierra Club director Jeff Tittel. “It is one of the most valuable pieces of property the state of New Jersey owns. We basically gave it away for free. If it’s successful, we’re going to spend hundreds of millions of dollars improving roads.”
It’s not clear if American Dream tenants have delayed rent, though Big Snow said it has paid on time and is making snow now so it can open as soon as indoor amusements get Gov. Phil Murphy‘s approval.
Triple Five’s CEO has said he’d consider expanding its entertainment offerings to make up for the changing retail landscape. But McMahon said without a COVID-19 vaccine, people will be reluctant to gather in groups indoors, potentially leaving the road to reopening barren.
It’s all just part of another stop on the financial rollercoaster of the American Dream.
A rep for Gov. Murphy told CBS2 his office has been having discussions with Triple Five about the state’s reopening plans.