When the American Dream mall, a shopping and entertainment complex next to MetLife Stadium in East Rutherford, N.J., finally opened its doors to the public in October 2019, its owner, Triple Five Group, was eager to prove naysayers wrong.
Skepticism had abounded in the 15 years since construction started on the project, which was initially known as Xanadu Meadowlands and promised extravagances like an indoor ski slope. But the mall cycled through developers and billions of dollars in funding, and faced numerous delays.
Once Triple Five, the Canadian real estate firm behind Mall of America in Minnesota, took over in 2011, it was determined to reignite enthusiasm for the project. It changed the name from Xanadu to American Dream, altered an exterior that then-Gov. Chris Christie had called "the ugliest" in the state and promised even more marvels, like an indoor water park and additional roller coasters.
But only months after portions of the complex began opening, starting with its ice-skating rink and a Nickelodeon amusement park, the pandemic hit.
"It was extremely, extremely unfortunate, the timing of it all," Don Ghermezian, chief executive of Triple Five and co-chief executive of American Dream, said in an interview.
Ghermezian said he was upbeat about the future of the mall, which reopened some of its attractions Oct. 1. But the pandemic has battered many retailers and shopping malls and left many shoppers skittish about much of what Triple Five was betting on -- travel, crowds and the allure of indoor spaces. It also has put a spotlight on the money tied to the success of the complex, which is now facing the threat of yet another shutdown during the all-important Christmas shopping season as coronavirus cases spike again.
"It definitely is tremendously bad luck," said Vince Tibone, a retail analyst at Green Street, a commercial real estate analytics firm. "Until there's a widespread vaccine ... it's going to be hard for this mall to get the foot traffic it was hoping for."
Triple Five, which also owns Canada's West Edmonton mall, had anticipated 40 million visitors a year at American Dream, a notably ambitious figure that would put it on par with Walt Disney World in Orlando, Fla.
All three of Triple Five's malls have suffered this year because of the pandemic, including Mall of America, which reportedly entered a cash-management agreement last summer after missing months of mortgage payments.
The company projected that the American Dream complex would eventually support more than 20,000 jobs and generate nearly $150 million annually in state and local taxes, a lawyer for Triple Five wrote in an April letter to the Federal Reserve about its so-called Main Street lending program for midsize businesses. But the mall was still in the process of opening in phases it called "chapters" and its mid-March shutdown happened just days before the center could open its most standard offering -- its retail stores.
Since the mall was first conceived, it has had to grapple with a fast-changing shopping landscape and the bankruptcies of announced tenants. This year has spurred another wave of bankruptcies from major chains, including announced tenants like Lord & Taylor and Century 21.
Ghermezian said that the shopping center lost "very, very few tenants" and that those that had exited because of the pandemic were replaced. He said that if not for the shutdowns, as many as 200 of the mall's retail and food tenants would probably have opened this month. As of last week, he said, about 90 were open, including the biggest Zara in the United States and the flagship for the fast-fashion chain Primark.
Investors and local politicians, including in the borough of East Rutherford, have been concerned about the future of American Dream.
The $5 billion development has received hundreds of millions of dollars in taxpayer incentives and promised millions of dollars in payments in coming years to East Rutherford.
"We thought the Xanadu project would be open by 2007," said James Cassella, the former mayor of East Rutherford who retired in 2019 after more than 20 years in the role. Even after Triple Five entered the picture, he said, "there were more opening dates on this than you could imagine."
Cassella said that East Rutherford negotiated annual payments from American Dream that went out for decades, with additional money coming in after the mall opened. The borough also was looking forward to jobs created by the development.
But public records show that American Dream is behind on its payments to East Rutherford.
Investors also are watching a $27 million debt payment that is due next month.
When asked whether the debt payment would be made, Ghermezian said, "We are working with our lenders on a regular basis to put a plan in place that allows the center to continue to flourish." American Dream is also working out other payments, including those to East Rutherford, he said.