American dream owners default on loan, Murphy ‘still a believer’
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EAST RUTHERFORD, NJ – Governor Phil Murphy addressed the latest upcoming financial news from the American Dream Triple Five property group during his press conference on Wednesday.
The owners of American Dream used two other properties in the mall as collateral for the East Rutherford project. Now the lenders are ready to take a 49 percent of the capital at these properties, according to a Financial Times report.
NJ.com reports that Triple Five, which owns American Dream in addition to Minnesota’s Mall of America, used the 49 percent stake as guaranteed for a $ 1.2 billion construction loan in New Jersey.
The loan is held by a number of lenders, including JP Morgan, Goldman, Starwood Capital, CIM Group, Soros Fund Management, Wafra and iStar, NJ.com said.
Murphy said there were no plans for the state to provide additional funding to Triple Five, but added that he “still believes in this thing.”
“It’s an amazing concept that I think always pays off in normal times,” said Murphy. “I still think there is a place for something as experiential as this.”
Mega-mall owners have faced multiple funding challenges, and they were only amplified by the coronavirus pandemic.
NJ.com reported that Hagen told Bloomington, Minnesota City Council that Triple Five was going through a “cash flow crisis” linked to the pandemic.
American Dream has long had criticism in the state thanks to lingering financial problems and the millions of dollars the project received in state grants.
New Jersey Sierra Club Director Jeff Tittel called American Dream a “financial black hole.”
“Even though they received a government grant from the state, they did not have the private capital to complete construction of the mall. They had to borrow money against two of their other properties, the Mall of America. and the West Edmonton Mall. Now they can lose their other properties because the mall is still losing money and they can’t pay off their debt, ”he added.
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