Looking for (Another) $1.1 Billion to Finish an Amusement Mall

Looking for (Another) $1.1 Billion to Finish an Amusement Mall

The company already owns the two largest malls in North America: Mall of America outside of Minneapolis, at 5.6 million square feet, and the West Edmonton Mall in Canada, at 5.2 million square feet.

The $3 billion American Dream project sits next to MetLife Stadium, home of the Giants and Jets football teams, eight miles west of Times Square. Workers are renovating the unfinished multistory building erected by two previous developers and pouring the foundations and concrete structures for the water and amusement parks.

New steel for the mall has been erected and the much-reviled checkerboard pattern on the exterior of the existing building has mostly been replaced.

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American Dream will be “the pre-eminent tourist attraction” in North America, said Don Ghermezian, whose family controls the Triple Five Group that is developing the project. Credit Fred R. Conrad for The New York Times

Mr. Ghermezian said that his company had signed leases for 70 percent of the 2.9 million-square-foot complex and letters of intent with tenants for another 10 percent of the space.

Last week, Triple Five closed on $1.67 billion in construction loans. The municipal bonds, issued in two separate offerings, would total $1.1 billion.

The company has already spent $700 million at American Dream. Although opening dates have come and gone like clothing fads, Mr. Ghermezian said that American Dream would open in the spring of 2019.

“There’s nothing we can see that will change that date,” he said.

Analysts are divided about the mall’s prospects, given that an estimated 300 malls graded as second and third class are at risk of closing over the next five years, according to Green Street Advisors, a real estate research firm.

“This project sits at the crossroads of where malls are going,” said Jim Sullivan, president of the consulting group at Green Street, “with an emphasis on experiences, restaurants, entertainment and things unrelated to buying a sweater or a T-shirt.”

Triple Five has had great success in drawing regional residents and tourists to its malls, he added.

Lisa Washburn, a managing partner at Municipal Market Analytics, said that American Dream had unusual features that set it apart from the average mall. But, she said, “I think there are still significant challenges.”

For instance, American Dream is subject to local blue laws, which bar retail sales on Sundays, although the entertainment operations can remain open.

On Sundays during football season, patrons will have to compete for parking with Giants and Jets fans.

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Construction at the American Dream mall project in the Meadowlands. The latest opening date — there have been several — is spring of 2019. Credit Fred R. Conrad for The New York Times

And, Ms. Washburn added, “They’re trying to build in the most congested corridor in the region, which is already known for significant disruptions.”

Tourists flock to Mall of America, but will they leave Manhattan for the Meadowlands? Today, only one in five tourists who visit Manhattan — which has many of the retailers at American Dream as well as Broadway theaters, the High Line and the Empire State Building — even ventures down to Lower Manhattan.

Finally, should the project fail, lenders will be paid off before bondholders, adding to the risk of the investment.

The mall in the Meadowlands has been a long time coming. The original developer, Mills Corporation, conceived of something more akin to a traditional mall, although it boasted of a Ferris wheel and an indoor ski hill. It called the project Xanadu.

But Mills stumbled and in 2006 sold its stake in the project to Colony Capital, which lost its funding during the recession and stopped work in 2009. The two developers had spent more than $2 billion.

Triple Five took over in 2011, with Gov. Chris Christie promising that American Dream would open in time for the 2014 Super Bowl at MetLife Stadium. At that point, Triple Five expected to spend another $1.7 billion adding the indoor water and amusement parks.

Now, entertainment venues — LegoLand, an 18-hole miniature golf course, a Nickelodeon-themed amusement park, a DreamWorks-themed water park, an observation wheel and a bowling alley — now account for more than half the space.

Triple Five was following an imperative it followed elsewhere: Give patrons a reason to come to the mall other than shopping, which they can do at home in their pajamas.

“This is probably the only concept that could work,” said Triet M. Nguyen, who analyzes high-yield municipal bonds for A NAT/11 Capital, a financial advisory and consulting firm.

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