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Guest Opinion: American Scheme Mall - Another Financial Mess

Jeff Tittel | NJ Sierra Club

 

The developer of the American Dream Mall, Triple Five, has missed two monthly mortgage payments for Mall of America in Minnesota. Last year, Triple Five pledged 49% interest in Mall of America and another property as collateral for a $1.67 billion construction loan for the American Dream Mall in East Rutherford, NJ.

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“Financial problems with the American Dream Mall are back again. For 20 years, this mall has seen one calamity after another. Now there’s a new one. This has been a massive waste of money backed by New Jersey taxpayer funds, and now it still hasn’t opened because of the coronavirus. The mall owners have missed mortgage payments that are collateral for the American Dream. If they default on that mortgage, it affects financing for the American Dream, which then affects the financing that New Jersey put up,” said Jeff Tittel, Director of the New Jersey Sierra Club. “We have backed this project with $1.2 billion of public money that could’ve been used for building schools, taking lead out of drinking water, or cleaning up our toxic sites.”

 

The American Dream/Xanadu mega-mall is the largest public subsidized development project in state history.  The project received $350 million in direct state subsidies from EDA plus another $800 million for financing including $100 million for road improvements, bringing it up to $1.5 billion project.

 

“The American Scheme mega-mall has been the largest corporate subsidy in the state’s history. Now, retail has been hurt by the coronavirus. When the mall reopens, they will still have to follow social distancing protocols and limit the number of people. If people do want to go once it reopens, a daily visit to the mall is extremely expensive,” said Jeff Tittel. “If paying for parking wasn’t enough, a daily pass to ride American Dream rides will be $80 soon. Combined, that’s more than a season pass at Six Flags and just $5 shy of a daily pass for Disney World.”

 

The American Dream/Xanadu mall sits partly on wetlands in an environmentally sensitive area prone to flooding. Meadowlands resources are important for flood control, fisheries, and migratory birds.

 

“This is the worst project in the state’s history and it keeps getting worse. Every time there’s a problem with this mega mall, they make it bigger and throw more public money at it. Malls have been going out of style, and now more malls will close because of the coronavirus and social distancing protocols. This mall is jinxed, and unfortunately it is on state-owned land and financed with public money,” said Jeff Tittel, Director of the New Jersey Sierra Club. “We don’t know what will be worse. If the American Dream succeeds, we will see all of the pollution from the traffic coming to the mall plus possible gridlock it would cause to commuters. If it fails, it wastes billions of taxpayer dollars.”

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