The owners of American Dream mega malls are defaulting on loan. Lenders to take part in its other properties.

0
6
 The owners of American Dream mega malls are defaulting on loan.  Lenders to take part in its other properties.


The lenders behind the American Dream mega-mall project are set to take a 49% stake in two more malls owned by developer Triple Five that have been used as collateral for a $ 1.2 billion construction loan. dollars in New Jersey, the Financial Times reported, citing people. involved in the case.

The overdue loan is largely owned by JP Morgan, alongside Goldman, Starwood Capital, CIM Group, Soros Fund Management, Wafra and iStar. The restructuring, the Financial Times reported on Friday, was due to end as early as “this week”, although the process was complicated by the number of lenders and could be delayed.

An American Dream spokesperson declined to comment.

The cash flow crisis at American Dream came to light earlier this month when Kurt Hagen, senior vice president of development for Triple Five, said at a joint meeting of Bloomington, Minn., City council and his port authority that the pandemic had created a “very large cash flow.” flow crisis ”for American Dream and that collateral collection was“ likely to occur ”.

Hagen described the collateral pledge as an indirect interest that does not include any assets or property of Mall of America. “It just means that once we get back to profitability, 49% of that profit will go to American Dream lenders until that collateral is released,” Hagen said.

The developer also took legal action against a potential tenant for breach of contract because he failed to open two restaurants. And construction companies have filed nearly $ 41 million in liens against Triple Five, claiming it was due for work being done on the site.

American Dream closed its doors last March three days before planning to open its DreamWorks water park and retail business. It only reopened on October 1 and currently has eight attractions and 130 operating stores. And more openings are planned, including its Sea Life aquarium and Legoland Discovery Center, which are set to debut on May 4.

“Not opening and not being able to generate cash for six months created very significant problems,” Hagen said at the public meeting.

Triple Five also defaulted on its Mall of America mortgage when it closed. He missed three payments of $ 7 million on his $ 1.4 billion mortgage. The Canada-based developer struck a deal with lenders in August to avoid foreclosure on the Minnesota property and the account was updated in December.

The pandemic and the financial problems that come with it are just the latest hiccup in development in the Meadowlands, which has been ongoing for almost 20 years. Triple Five is the third developer to take over the project, initially known as Xanadu.

Please subscribe now and support the local journalism you rely on and trust.

Allison Pries can be reached at [email protected].

LEAVE A REPLY

Please enter your comment!
Please enter your name here