When the American Dream Mall, a large shopping and entertainment complex next to MetLife Stadium in East Rutherford, NJ, finally opened to the public last October, its owner, the Triple Five Group, was a denial. He was enthusiastic about proving his mistakes.
Initially called Xanadu Meadows, there was a lot of skepticism for the 15 years since the construction of a project that promised luxury like an indoor ski resort was first started. However, the mall circulated billions of dollars with developers and faced many delays.
After the Canadian real estate company Triple Five, behind the Mall of America in Minnesota, took over in 2011, it was decided to rekindle the enthusiasm for the project. It changed its name from Xanadu to the American Dream, changed the look that then Governor Chris Christie called “the ugliest” in the state, and promised even more wonders, including indoor water parks and additional roller coasters.
However, a pandemic occurred just a few months after some of the complex began to open, starting with the ice skating rink and the Nickelodeon amusement park.
“It was very, very disappointing, it was all the time,” Don Germedian, CEO of Triple Five and co-CEO of the American Dream, said in an interview. “The closure took place in March, just a few days before we planned to open the center’s balance.”
Germedian said he was bright about the future of the mall, which reopened several attractions on October 1. But the pandemic struck many retailers and shopping malls, sickening many shoppers for much of what Triple Five was betting on — the charm of travel, crowds, and indoor spaces. It also spotlights the money that has led to the success of the complex facing yet another shutdown threat during the crucial holiday shopping season, as coronavirus cases are skyrocketing again. ..
“It’s definitely very unlucky,” said Vince Tibourne, a retail analyst at Green Street, a commercial real estate analyst. “Until the vaccine becomes widespread and domestic and international travel returns to its previous state, it will be difficult to get the foot traffic that the mall expected.”
Triple Five, also owned by West Edmonton Mall in Canada, expected 40 million visitors a year in the American Dream. This is an ambitious person comparable to Walt Disney World in Orlando, Florida. Tibourne is already faced with questions about how the complex will shuttle tourists between Manhattan and northern New Jersey. Also, beyond the pandemic closure of stores, the American Dream was when public health officials were telling people to stay, from ski slopes and caviar bars to roller coasters and DreamWorks-themed water parks. We are faced with the problem that its appeal is indoors. outside.
All three triple five malls are suffering this year due to a pandemic. The Mall of America reportedly signed a cash management contract last summer after missing a few months of mortgage payments.
The company predicted that the American Dream Complex would eventually support more than 20,000 jobs and generate nearly $ 150 million annually in state and local taxes, a Triple Five lawyer said in April on the Federal Reserve Board of Governors. I wrote about the so-called Main Street Financing Program addressed to the Society. For mid-sized companies. However, the mall is still in the process of opening in what is called a “chapter,” and the closure in mid-March took place a few days before the center opened its most standard service, retail stores.
Since the mall was first invented, we need to tackle the rapidly changing shopping environment, the bankruptcies of announced tenants such as Barneys New York and Toys “R” Us, and the fact that the county in which it is based bans retail. did. Sale on Sunday. This year spurred another wave of bankruptcy from major chains, including announced tenants such as Lord & Taylor and Century 21.
Germedian said the shopping center lost “very few tenants” and those that left for the pandemic were replaced. He said that without closure, perhaps 200 of the mall’s retail and food tenants would have opened this month. As of last week, he said, about 90 stores were open, including the flagship store of Primark, the largest Zara and fast fashion chain in the United States.
Investors and local politicians, including the East Rutherford Autonomous Region, are concerned about the future of the American dream.
The $ 5 billion development received hundreds of millions of dollars in taxpayer incentives and promised East Rutherford to pay millions of dollars over the next few years. East Rutherford monitors the progress of the site, which feels like eternity.
“We expected the Xanadu project to begin by 2007,” said James Cassella, a former mayor of East Rutherford, who retired in 2019 after a term of more than 20 years. Even after the introduction of Triple Five, he said, “There were more opening days than I had imagined.”
“There was always something to delay it from day one,” he said. “Buildings, Financing, Economy, Interest Rates-You Name It.”
Cassella said East Rutherford had negotiated an annual payment from the American Dream that had gone out for decades and that additional money would come in after the mall opened. The autonomous region was also looking forward to the work created by the development.
However, public records show that the American Dream is lagging behind in payments to East Rutherford. In January, East Rutherford voters said a $ 35.5 million 20-year bond to fund school improvements after authorities said funding from American Dream Development would help reduce the tax burden on residents. Was approved in a narrow sense. This bond became an issue in this year’s local elections, as concerns grew, especially in shopping centers. Representatives of East Rutherford did not respond to requests for comment.
When the mall reopened on October 1, Municipal Market Analytics analyst Lisa Washburn investigated what the first business day would look like. She said the crowd was sparse and many stores had more workers than customers. (She bought a $ 14 worth of gummy bears at the IT’SUGAR candy store.)
The development is on state-owned land and we were able to obtain tax-exempt debt loans through a series of bonds that could pose a risk to investors.
Washburn said it is difficult to get an accurate picture of the situation, as bond investors have little transparency about the mall’s finances. “Disclosure is very poor,” she said.
Investors are also looking to pay $ 27 million in debt to be paid next month.
When asked if he would pay off his debt, Germedian said, “We regularly work with lenders to help the center continue to prosper.” The American Dream is also considering other payments, including payments to East Rutherford, he said.
“Yes, I have money to borrow,” he said. “But again, unlike other developers in the country where the project was totally shut down, we work as true partners with municipalities, lenders, tenants and everyone is in a fair position. You need to make sure you take a fair share of how to manage this pandemic. “
Germedian said Triple Five still intends to build “millions of square feet” in Meadows, planning a convention center and approximately 3,000 to 3,500 hotel rooms. The company expects New York visitors, especially families, to stay in the American Dream before traveling to New York as tourism recovers.
The Triple Five, named after the three generations of the Germedian family and their five founders, continues to pursue similarly ambitious mall projects in Miami, perhaps at a slower pace than before Covid-19. Said Germedian. Recognizing the challenges facing shopping centers, he said projects like the American Dream set them apart from typical malls and stores.
“You’ll see many shopping centers seized this year,” he said. “The last person left will succeed, and we firmly believe that it is the American dream in this market, 100%.”
“We will own the American Dream for the next 100 years, 200 years, or whatever,” he added.
For now, the American Dream is working to persuade people to visit. Parking fees have been exempted since reopening. Social media advertising emphasizes guidelines on social distance and virus safety. The ad encourages people to shop, visit characters like SpongeBob SquarePants at Nickelodeon Theme Park, and escape the cold at the mall’s water park, where temperatures are kept at 81 degrees Fahrenheit.
“I’m worried that without a pandemic, the American dream would be overloaded with traffic,” said Ghermezian.
Former East Rutherford city councilman Joel Brizzi said he had long been optimistic about the project and the Triple Five, but was concerned about the mall and whether it could withstand a second pandemic-related closure. ..
“How long can you continue without income?” Blitzy said. “The jury is still considering whether it will survive.”
Former mayor Cassella also said he was worried about Mall’s ability to survive the pandemic.
“There are always people who say,’I hope this place fails,’ but if this fails, it won’t be good for everyone,” he said. “It’s certainly an absolute disaster for the state, it’s complicated, and frankly, East Rutherford will lose because we’ve been there. It’s going to be a huge loss of income.”
New Jersey’s American Dream Mall is still waiting to fully open
Source link New Jersey’s American Dream Mall is still waiting to fully open