American Dream Owners Default On Loan, Murphy 'Still A Believer'

EAST RUTHERFORD, NJ — Gov. Phil Murphy addressed the latest financial news coming American Dream ownership group Triple Five during his Wednesday news conference.

The owners of American Dream used two other mall properties as collateral for the East Rutherford project. Now, lenders are poised to take a 49 percent stake in those properties, according to a Financial Times report.

NJ.com reports that Triple Five, who owns American Dream in addition to Minnesota's Mall of America, used the 49 percent stake as collateral 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 further funding to Triple Five, but added that he was "still a believer in this thing."

"It's an extraordinary concept that I think in a normal time is still a winner," said Murphy."I still think there's a place for something that is as experiential as this is."

The mega-mall owners have faced multiple financing issues, and they were only amplified by the coronavirus pandemic.

Triple Five missed two mortgage payments to the bank, according to a June 2 report in the Bergen Record and CNBC. Read more: Owner Of American Dream Missed Two Mortgage Payments: Reports

It didn't help that the mall sat unopened for much of the pandemic. Retail and indoor entertainment weren't able to reopen until October 1 after closing in March 2020. Read more: American Dream Announces Oct. 1 Reopening

So this news doesn't come as a surprise, and Kurt Hagen, senior vice president of development for Triple Five, even admitted that it could happen recently.

NJ.com reported that Hagen told the Bloomington, Minnesota city council that Triple Five was having a "cash flow crisis" related to the pandemic.

American Dream has long had critics in the state thanks to persistent financial troubles and the millions of dollars the project received in state subsidies.

New Jersey Sierra Club Director Jeff Tittel called American Dream "a black hole of finance."

"Even though they got a public subsidy from the state, they didn’t have the private capital to finish building the mall. They had to borrow money against two of their other properties, the Mall of America and West Edmonton Mall. Now they may 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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