New Jersey shopping center and entertainment complex American Dream did not pay interest on municipal loans sold to help fund the $5 billion company. The missed payment was for $8.8 million, according to a regulatory filing. Payment on the $287 million the debt was due August 1, according to the filing. The reserve account balance previously used to make loan payments is $862.12. However, non-payment does not constitute default and does not obligate American Dream to immediately repay the loan.
Additionally, American Dream has “no financial obligation to make any payments to bondholders,” a company spokesperson said in a statement emailed to Bloomberg. The statement also noted that bondholders are “paid exclusively from sales tax generated by the project, subject to state appropriation of up to 75% of these collected funds.
Most 3 million square feet The mall, which includes an indoor ski slope, amusement park and water park, was designed to function as a comprehensive destination rather than a traditional mall. The project has had a troubled history, including the short window between grand opening in late 2019 and COVID-19 forcing the mall to temporarily close. However, American Dream persevered, and the final section, a luxury retailer room called The Avenue, opened in fall 2021.
American Dream has also struggled with the same challenges that all malls have faced – bringing back foot traffic after the pandemic-induced surge in e-commerce. Focusing on experiences is one of the key strategies developers have been looking at, and American Dream is well positioned to leverage this approach in a major way. However, it remains to be seen whether the theme park-dotted space can make the most of this opportunity – the destination has reported a $60 million loss in 2021, according to a draft filing with the Municipal Securities Regulatory Board.