The nightmare continues for the American Dream mall, forced to tap into a reserve fund to make its latest bond payment.
The mall in New Jersey’s Meadowlands used $9.3 million from a reserve fund on August 2 to make payment on its nearly $290 million debt. The mall now has just $9.3 million left in the fund according to Bloomberg News, enough to make one more debt payment on February 1.
The municipal bonds were issued in 2017, backed by a pledge of 75 percent of sales tax receipts from purchases made at the mall. Additionally, developer Triple Five Group sold $800 million in debt, backed by payments it would make to bondholders in lieu of property taxes.
Retail stores in the mall didn’t open until last October, in the midst of the pandemic. The mall 76 percent leased in the second quarter and reported $78.1 million in gross sales, a 27.4 percent increase from the first quarter.
Cash flow problems are nothing new for the mall, which borrowed over $1 billion in construction loans. The struggle to pay those off has led to senior construction loan holders grabbing minority stakes in other Triple Five properties, including the Mall of America and the West Edmonton Mall.
[Bloomberg News] — Holden Walter-Warner