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Bonds Tied To American Dream Mall Fails To Make $9M Debt Payment

The American Dream megamall in New Jersey

Municipal bonds tied to American Dream, the mega mall in New Jersey, this week missed a roughly $9M debt service payment after missing several last year.

The Canadian developer of the complex, Triple Five, failed to meet the semiannual payment on the East Rutherford, New Jersey, property, CoStar reports. The $8.8M payment is for interest due on about $290M in municipal bonds.

The company had been drawing on a reserve account to make good on its debt obligations, but there isn't enough left to make this payment, per the publication. The account holds $878.50, according to bond trustee U.S. Bank National Association.

However, American Dream told CoStar by email that the debt service payments are made by the state, and the company is therefore not responsible for those payments or to provide funds for the reserve.

The missed payment doesn't mean American Dream is in default. In a statement to CoStar, U.S. Bank said the notice “was to advise that sales tax revenues have not yet been received and was not a notice of default. ... American Dream and its tenants, like all other businesses in the state, have been making sales tax payments, which are the source of revenue to make the grant payments to the bond trustee.”

Last year, lenders on the project, a group led by JPMorgan Chase, agreed to grant a four-year extension on repayments on its $1.7B in construction loans, setting the new maturity date in October 2026 instead of 2022. That came after the American Dream owner missed its payment deadline for an $800M bond payment to U.S. Bank NA last June.

The mall, a 3.5M SF complex that features an indoor ski slope, a Dreamworks water park and a Ferris wheel, lost $60M in 2021. 

It officially opened in 2019 but was forced to close just a few months later because of the pandemic. Flooding from Hurricane Ida resulted in closure again in 2021, soon after reopening.

In the third quarter of last year, American Dream posted $107.7M in gross profits, a 30% jump from the year before. In total, Triple Five borrowed about $2.7B from banks and bondholders to build the property, per CoStar.

CORRECTION, FEB. 9, 2 P.M. ET: The interest payments are related to municipal bonds tied to the American Dream shopping mall. An earlier version of this story misstated the nature of the payments. This story has been updated.