big boxes

The American Dream Is Almost in Default

Bad news for the New Jersey megamall. Photo: Seth Wenig/AP/Shutterstock

The second-largest mall in the country is in trouble after Triple Five, the developer and third owner of East Rutherford, New Jerseyโ€™s American Dream, failed to make a payment on an $800 million bond for the property this week. As of June 16, the 3 million-square-foot megamall in the parking lot of MetLife Stadium, with its indoor ski slope, water park, and skating rink, will officially be in default, with a hefty bailout needed to save it.

This is the latest in a trail of bad financial decisions as long as the walk from Saks to the Nickelodeon roller coaster. In 2019, the mall made its grand debut over a decade late with a vision similar to Triple Fiveโ€™s crown jewel, the Mall of America in Minneapolis. The idea was to make it just as gloriously over the top. (โ€œA oneโ€ofโ€aโ€kind property that will reshape the way people think about entertainment, theme parks, and shopping,โ€ the press release read at the time. Though it wasnโ€™t โ€œtacky enough,โ€ Curbedโ€™s Justin Davidson wrote in 2021.) But the ribbon had barely been cut on the first phase of its opening when the mall was temporarily shuttered by the pandemic a few months later. Boosters touted the mallโ€™s size as ideal for COVID-era shoppingย โ€” โ€œBecause weโ€™re three million square feet, everyone is naturally socially distant,โ€ CEO Mark Ghermezian told CNBC in November 2020 โ€” but that kind of turnout never materialized, as Bloomberg reported in February. Ghermezian said that American Dream would have a 95 percent occupancy rate by the end of 2021, but photos from early 2022 showed entire corridors of papered-over storefronts. It lost $60 million last year, and making payments on its massive construction debt left it with only $820 โ€” yes, $820 โ€” in a reserve account last year.

But American Dreamโ€™s demise is more than bad timing. The collapse of the mall as an institution may be part of a bigger post-COVID trend, notes Alexandra Lange,ย who visits the mall in the opening of her new book Meet Me by the Fountain: An Inside History of the Mall. As she wrote this week in the New York Times, forecasters predict that a quarter of the countryโ€™s 1,000 malls will close within five years. But the developerโ€™s choice to remake one mall into another mall โ€” without adding a better connection to the outdoors, carving out a more permeable perimeter, or redeveloping the acres of parking lots โ€” was misguided in 2019 and downright irresponsible in 2022. โ€œReminding ourselves of the mallโ€™s garden origins offers clues as to how they might be transformed,โ€ Lange writes. Inspiration might be found in the name of the original never-completed mall American Dream replaced: Meadowlands Xanadu.

The American Dream Is Almost in Default