For developers in New Jersey, achieving the American Dream megamall is proving costly. Construction delays at the 3 million square foot retail and entertainment super-plex in Eater Rutherford have drained the reserve account backing the project’s bonds. After a $9.3 million payment due last Tuesday servicing $290 million in debt, only $820 was left in the account, according to securities filings.
The pandemic has pushed the project and its bank accounts to the brink but there are signs of success. The mall is 77 percent leased or self-operated with more leases in the contract phase that could soon bump occupancy up to 82 percent, according to leasing reports. That leaves nearly 600,000 square feet of vacant space. The most recent reporting period showed gross sales were $83 million, up $5 million from the previous period.
The success may not be enough to keep the mall above water. The mall’s developer, Triple Five, defaulted on its $1.4 billion mortgages at the Mall of America after missing months of payments. Triple Five made the loan current in late 2020, but was forced to give up a 49 percent stake in two of its malls to American Dream’s construction lenders as collateral on a $1.2 billion construction loan for the project. Hope is not lost but the financial road ahead is fraught. The future of Triple Five and the American Dream Mall comes down to how soon in-store retail recovers from the pandemic.