The American Dream megamall across the Hudson River from New York City is worth just half of what it cost to build, according to a new property assessment.

The 3.5M SF mall and entertainment complex in the Meadowlands, which features a ski slope, water park and amusement park, was valued at $2.5B this month by the Borough of East Rutherford, Bloomberg reported. Its assessed value in 2024 was $3.3B.

The new assessment was published in a revised tax bill posted Tuesday on the Municipal Securities Rulemaking Board’s EMMA website.

Edmonton, Canada-based Triple Five Group, the developer of the $5B mall, didn't immediately respond to Bisnow’s request for comment.

New Jersey previously approved a $1.1B package of tax-exempt municipal bonds to finance the construction of the mall after state officials argued that the development would generate local tax revenue and jobs.

The lower valuation could hurt municipal bondholders, which hold $800M of debt backed by a payment-in-lieu-of-taxes mechanism. PILOT payments equate to 90% of what the property taxes owed would be. The principal on the $800M of bonds matures in balloon payments in 2027, 2037, 2042 and 2050.

American Dream’s annual payment debt service on the bonds was $54.1M last year, but the mall’s payment to the bond trustee was $48.4M. The trustee dipped into reserves to make up the difference and pay the full amount to bondholders.

The new $2.5B valuation would mean the mall’s annual PILOT payment is roughly $36.5M, likely resulting in a repeat scenario where the trustee would have to use more funds from the reserves to cover the debt.

The trustee had $38M in reserves as of Dec. 1, 2024. American Dream has an upcoming $27M semi-annual interest payment on June 1.

Without enough money to make the principal payments, the bond maturity is extended until they are fully paid or until Dec. 1, 2056 at the latest. PILOT bondholders aren’t entitled to more payments after that date.

Triple Five Group has pushed the assessor to lower the property's value every year from 2019 through 2025, arguing that it has been adversely affected by the pandemic.

The mall opened in late 2019, two decades after the site was first proposed but just months before the pandemic, which delayed many of its retail openings and eliminated foot traffic until a year after the mall opened its doors.

Still, the Ghermezians, the Canadian family behind Triple Five Group and owners of the American Dream, have been hopeful that the 2026 World Cup Final across the Meadowlands complex will bring more footfall, as well as the 42K SF experiential retail concept with Hasbro that they announced last year.