It’s deja vu all over again at the American Dream mall.
Don Ghermezian’s Triple Five Group missed its $8.8 million semiannual debt service payment at the East Rutherford shopping complex, CoStar reported. The payment is for interest due on $290 million in municipal bonds.
Triple Five had been pulling from its reserves to pay off its debt, but that wasn’t possible this time around. There’s only $878.50 left in the reserve account, according to bond trustee U.S. Bank National Association.
Triple Five disavowed the debt service payment, telling the outlet the state was responsible for this payment, not the company. The developer made the same argument when it previously missed the semiannual payment. As was the case last year, the latest missed payment doesn’t constitute a default.
Still, it’s the latest sign of distress at the megamall, which has been mired in problems since its ill-timed pandemic opening.
In August, the mall missed the $8.8 million payment on municipal bonds that were used to finance the development. At the time, the mall was waiting on approval of a document from the state’s Economic Development Authority that would certify project expenditures.
The mall is eligible for the grant because it’s in an economic redevelopment area. The grant maxes out at $390 million over 20 years. About $290 million in municipal bond obligations are backed by the grants, which are based on sales tax collections.
In June, Triple Five failed to make a semiannual payment on an $800 million municipal bond, which the developer ultimately paid late. Triple Five received $2.7 billion from banks and bondholders to complete the retail hub.
In November, Triple Five landed a four-year extension from JPMorganChase, which had a loan nearing maturity. Under the agreement, the developer’s deadline for paying back $1.7 billion in construction financing was pushed to October 2026.
— Holden Walter-Warner