After Many Missed Deadlines, New Jersey Megamall Is Again Taking Shape

Over the last 13 years, opening dates for a huge shopping and entertainment complex in the Meadowlands have flashed by like exits on the New Jersey Turnpike, which runs past the site of the long-delayed project in East Rutherford, N.J.

On its third developer since 2003, the mall, which started out as Xanadu and along the way became American Dream, is now slated to open in fall 2018, the developer, Triple Five Group, says.

After an eight-month standstill, hundreds of construction workers are back at work on the site that is supposed to house not only a vast array of stores, but also a 16-story indoor ski hill, an aquarium, an indoor water park with a 1.5-acre pool capable of generating seven-foot waves, and the largest indoor theme park in the Western Hemisphere, with, count them, four roller coasters.

“What we’re creating here is out of this world,” Don Ghermezian, whose family controls Triple Five Group, said during an interview at the company’s stark white offices overlooking the construction site. “It’s the best of retail and entertainment combined in one environment. There isn’t a project in the world that has developed this large a concentration of entertainment-retail, not in China, not in Dubai.”

The mall, however, is planned for a bleak swath of New Jersey, eight miles west of Manhattan, at a time when space sits empty at hundreds of shopping centers in the United States and internet sales are skyrocketing.

The latest twist for American Dream came with the election of President-elect Donald J. Trump. Mr. Trump once competed for the right to build the mall, and lost out to Triple Five, a Canadian company that already owns the two largest malls in the Western Hemisphere, the Mall of America in Minnesota and the West Edmonton Mall in Canada.

The developers had planned to sell more than $1 billion worth of tax-free bonds in September to help pay for the project, but the offering was delayed by a lawsuit. By the time a judge had decided in Triple Five’s favor, interest rates had started climbing after Mr. Trump’s victory, and investors had grown wary of the bond market.

Mr. Ghermezian said his company had leased 70 percent of the 2.9 million square feet available at American Dream. The company, which has already poured $700 million into the project, is now spending roughly $1 million a day on construction.

Triple Five says the complex will attract 40 million shoppers, half of them tourists visiting New York City. At least some retailers have accepted that argument. Hudson Bay Company, which owns Saks Fifth Avenue and other stores, closed the Saks in nearby Summit, N.J., and has committed to opening a Saks, a Saks Off 5th discount store and a Lord & Taylor at American Dream.

Primark, an Irish retailer of fast fashion, plans to open an American flagship there. And Toys “R” Us will open its own flagship as well as an F. A. O. Schwarz store.

Alan Napack, a retail broker at Cushman & Wakefield who worked on the Primark deal, said he was a “believer” in the project.

“I think families from all around the tristate area will be going there a lot,” he said. “I think people from New York will go there for the entertainment. It’s an excuse to get out of the city and do some cool things.”

Still, there are six large malls within a 16-minute drive of the site, near MetLife Stadium. And mall operators are under increasing pressure in the face of soaring internet sales. By one estimate, 200 regional malls across the country have vacancy rates of 35 percent or more.

“There’s no shortage of malls in the state of New Jersey, and there’s no reason to create additional traffic in that corridor,” said Lisa Washburn, a managing partner at Municipal Market Analytics, an independent research firm. “You’re not going to create net new spending. You’re just going to draw sales from one location to another.”

Originally proposed in 2003, the project was first promoted as a new development at the state’s sports and exposition complex that would not cost taxpayers a dime. The original developer, the Mills Corporation, made an upfront payment of $160 million on rent.

In 2006, Steven Mnuchin, Mr. Trump’s pick for Treasury secretary, was part of a joint venture that took over when Mills teetered at the edge of bankruptcy. Mr. Mnuchin’s company at the time, Dune Capital, formed a partnership to run the mall with Colony Capital, whose chairman, Thomas J. Barrack Jr., was on the shortlist to be Treasury secretary in the Trump administration.

Together, they spent a total of $1.9 billion on the project, which was then called Xanadu, before succumbing to heavy debts and a recession.

During the recession in 2010, Mr. Mnuchin and Mr. Barrack’s companies lost their combined $600 million investment when lenders took control of the stalled project.

The lenders then solicited proposals from a small group of developers, including Triple Five and TPG Real Estate Group, a large private equity investment firm, in partnership with Mr. Trump, according to Mr. Ghermezian and TPG. TPG ultimately did not make a formal bid.

Triple Five got the deal. At the time, Gov. Chris Christie of New Jersey, a Republican, announced the new mall would open in time for the 2014 Super Bowl, and he offered the developer public financing.

Tony Armlin, Triple Five’s vice president for development, said he expected to sell the bonds next month as the market settled. But there is no guarantee that will happen, and the bond sale is directly tied to the conventional loans.

The Ghermezians, however, say they will pursue the project relentlessly. In addition to its other amenities, the complex is supposed to have a LegoLand entertainment center, an 18-hole miniature golf course, a performing arts center, a 300-foot-tall observation wheel, a professional-size ice rink and movie theaters.

“We’ve had to put out fires that we did not create,” Mr. Ghermezian said. “They haven’t bothered me because I’m uncompromising.”

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