Megamall American Dream nearly drained its reserves to pay off its bonds

American Dream Mega Mall and Entertainment Complex in East Rutherford, New Jersey. After more than 17 years of operation, it finally opened on October 25, 2019. Then came the coronovirus pandemic.

Timothy A. Clary | AFP | Getty Images

The American Dream Mega Mall in New Jersey is running out of money due to construction delays and delays in reopening stores.

The 3-million-square-foot retail and entertainment complex nearly emptied its reserve account to make a $9.3 million payment due Tuesday on about $290 million of debt backed by sales tax revenue.

The statement said that about $820 remained in the reserve fund. And it’s unclear if the developers will be able to make their next payment, due on August 1st.

American Dream spokeswoman Melissa Howard said developers at the Triple Five Group are “extremely pleased” with the tenants’ initial success. American Dream will open more than 100 retail, entertainment and restaurant concepts this year, including a two-story Gucci flagship, she said.

The filing also included a letter from the bond services firm Trimont Real Estate Advisors stating that American Dream was not offering cost and performance updates, as it is required to do under the bond documents.

“While everyone is aware of the difficulties associated with the pandemic and the possibility that the grant proceeds received now may not be enough to fully pay off the bonds, this does not relieve the developer of the responsibility for meeting its obligations under various agreements,” Trimont said. in a letter dated 18 January.

The health crisis caused by Covid-19 has brought a new set of obstacles to the American Dream, which took decades to build. On March 16, 2020 — just three days before the grand opening of dozens of retail stores — the megamall closed due to pandemic-related restrictions. Parts of the property have since reopened or officially opened their doors, albeit with a delay. The luxury store wing debuted last fall, with just a few stores including Hermes and Saks Fifth Avenue.

According to separate public disclosures, American Dream sales for the first three quarters of 2021 were about $220 million. And this is far from the $ 2 billion that, according to the forecasts of the developers, American Dream will bring in the first year of operation.

As of January 1, about 77% of the space has been leased from American Dream, with another 5% under negotiation.

Triple Five had previously defaulted on a $1.4 billion Mall of America mortgage after missing months of payments. He struggled to pay his bills when tenants didn’t pay their rent on time. However, he eventually reached an agreement with creditors to avoid foreclosure on the property, and as of December 2020, the loan has been repaid.

Then, last year, Triple Five lost 49% of its holdings in Mall of America and West Edmonton Mall in Canada to construction lenders American Dream.

In December, Toys R Us opened a flagship store in American Dream, which was seen as a small vote of confidence in the megamall.

bloomberg first reported filing.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button