The 2 Biggest Malls In North America Are Now Collateral For Long-Delayed 3M SF Project In New Jersey
A mega-mall developer is putting its past successes on the line to bet on its latest big gamble.
To build its 3M SF American Dream Meadowlands mall in East Rutherford New Jersey, Triple Five Group secured a $1.67B construction loan with Goldman Sachs and JPMorgan Chase, CoStar reports. To secure the loan, Triple Five put up 49% ownership stakes in Minnesota's Mall of America and the West Edmonton Mall in Canada as collateral.
Triple Five Group developed the West Edmonton Mall in 1981 and the Mall of America in 1992, and they still stand as the largest and second largest malls in North America, respectively, by total square footage. (In terms of leasable square footage, the King of Prussia Mall in the Philadelphia suburbs overtook the Mall of America with a 2016 expansion.)
The terms of the construction loan for American Dream were discovered in an audit by Mall of America's host town of Bloomington, Minnesota, as Triple Five seeks permits to add a $250M indoor water park, CoStar reports. Even through decades of shifts in the way people shop and spend money, Mall of America and the West Edmonton Mall have remained strong performers due to their early adoption of entertainment uses and their status as tourist attractions.
Over 16 years after construction began, the American Dream is poised to open this fall as an even more entertainment-heavy center than its predecessors. It will also be deeply integrated with Coca-Cola thanks to a unique brand partnership.
Triple Five still plans to surpass Mall of America with its next project, American Dream Miami in Dade County, Florida. As with the New Jersey version, plans have been in the works for years without any construction, which can't even start without supporting infrastructure work on the surrounding highways. Completion isn't expected until the late 2020s at the earliest.
Through several lawsuits and long periods of inactivity, the mall, which was originally set to be named Xanadu, has become a magnet for local criticism. If it fails and Triple Five defaults on its massive loan, two financial giants will become major partners in properties that are crucial economic drivers for their relatively small surrounding communities.
Representatives from Bloomington expressed confidence that even if Triple Five defaults, Goldman Sachs and JPMorgan would still be invested in and capable of continued success at Mall of America, CoStar reports.
