Paul Ghermezian doesn’t know each visitor to American Dream. But when they walk through the doors of the 3-million-square-foot megamall in East Rutherford, New Jersey, they are inhabiting a world that he and his family created.
It’s a world of polished marble floors and outsized entertainment concepts so sprawling that he took a golf cart to show it off. (Paul rode in the back seat.) The cart’s driver pulled up to a Sesame Street-themed indoor playground, where Paul joined Big Bird on the stoop of a pretend brownstone as parents watched wiggly toddlers play. Next, the cart weaved past the ice rink and around shoppers on giant motorized stuffed animals (it skipped the indoor ski slope), finally stopping outside the Nickelodeon Universe theme park.
Screams erupted from a twisted maze of roller coasters and Taylor Swift sang “It’s gonna be alright” in the background.
Paul got out of the cart and walked to a mezzanine that overlooks the fantasy land his family had painstakingly built. But he didn’t utter any sweeping declarations.
“We have the bucking rhino in the back, which is a figure eight that spins and shoots you backwards,” he said, describing the minutia of just one of the attractions in this giant creation, where the Ghermezians were initially aiming for 110,000 visitors a day. “Then we have the big drop tower and some other really cool rides. We looked for the newest, most innovative and the best — and we didn’t shrink them.”
Big is their style. The Ghermezian business, Triple Five Group of Companies, owns the three largest North American shopping centers — 12.4 million square feet of mall. Triple Five rescued American Dream from near-failure and bankruptcy, and despite plenty of skepticism, the Persian-Jewish family supersized everything: the roller coasters, the two-story Hermès store, the enclosed surfing wave pool, the topiaries in the luxury wing, the entry fees.
But it’s also a place of small considerations, where the water park has a modesty wall so observant Jews can enjoy it, and where the amusements seem to thrive amidst Northeastern winters.
“For better or for worse, the lenders are partners with Triple Five.”
Even after the Ghermezians finally got the place open in October of 2019, Covid closures, financial problems and lawsuits have haunted the shopping and entertainment behemoth. They lost a lot of money in 2021 and 2022. A $1.7 billion construction loan comes due next year.
Today, as American Dream benefits from a retail upturn, it’s starting to look like the next generation of Ghermezians, which includes Paul and his cousin Don, might actually turn things around, even if that means flouting Bergen County blue laws by keeping stores open on Sundays.
“The point ultimately is that the Ghermezians built this beautiful asset, this Vegas-style property,” Shlomo Chopp, managing partner at Case Equity Partners, said. “But are there going to be enough retailers to go in there, and enough consumers to pay the price?”
Made in Canada
Known for their splashy real estate projects and high-profile philanthropy, many of the publicity-shy Ghermezians live in Riverdale, in the North Bronx, far away from the Persian-Jewish real estate dynasties of Great Neck or Beverly Hills.
They arrived there by way of Edmonton, where Jacob “Papa” Ghermezian used the proceeds from his rugs and antiques business to start buying real estate in the mid-1960s. He brought his four sons — Nader, Raphael, Bahman and Eskander — into the fold.
Triple Five “was formed with the backing of 551 silent partners, Iranians who needed a secret conduit to reinvest their wealth in order to avoid Iran’s notoriously capricious habit of retroactive taxation,” according to Peter C. Newman’s 1998 book “Titans: How the New Canadian Establishment Seized Power.” The company, supposedly named for its five founders, took its first stab at “retailtainment” in the 1980s with the 3.8-million-square-foot, $1.1 billion West Edmonton Mall.
“They didn’t know anything about it, how to design it, how to build it, how to lease the space,” Paul said. “Then they went out and signed Eaton’s [once Canada’s largest department store], and started building their first shopping center.”
The mall eventually grew to include an ice rink and amusement park, where families could escape Edmonton’s cold. The Ghermezians replicated the formula of mixing retail and attractions in Minnesota with Mall of America, the country’s largest at 5.6 million square feet. The New Jersey mall, the second biggest, is their latest project. Their planned American Dream Miami, if it ever gets built, would be 6 million.
Six Ghermezians now work full-time at American Dream.
Paul and Don run the day-to-day operations from side-by-side offices in a building across the highway from the complex. Paul is in charge of product development and Don spearheads leasing. They report directly to their fathers, but all the (almost exclusively male) Ghermezians who work at Triple Five stay in constant contact on WhatsApp and occasionally gather in person at the company’s headquarters.
“We have a dynamic,” Paul said. “The conversations can take unpredictable twists. Some of them are harder conversations and some are just like, ‘Hey, great to see you guys. How was your vacation?’”
The mall employs thousands, including a team of executives whom Paul described as “the best people who are loyal and trustworthy and who get the culture.”
“At the family weddings, you’ll see that half the place is family and the other half is coworkers that have been with us for so long that they’re like family,” Paul said. “We really pride ourselves on being able to communicate with each other. Pulling in non-family members whom we really trust is really important to us.”
Family, faith and real estate
At least one of the Ghermezians can usually be found roaming American Dream’s hallways — except from sundown on Friday to sundown on Saturday when they observe Shabbat. Faith is at the center of the family’s worldview, and that bleeds into the business.
“There was a particular reason why Hashem allowed us to build this center,” Don told a group at a post-nuptials celebration inside an Angry Birds-themed room designed for birthday parties at American Dream; his speech was filmed and posted to YouTube. “He gave us the center for nothing other than to bring the Jewish community together.”
On the Wednesday afternoon in January when Paul was moseying around, dozens of male shoppers were there, dressed in tzizit and yarmulkes. The mall has kosher pizza and falafel restaurants and a department store “for the modest fashion consumer” that sells clothing designed for Orthodox women and children. Spare rooms are used for Jewish lifecycle events.
Letting retailers operate on Sundays in spite of the county’s so-called blue laws establishes a weekend shopping day for others who observe Shabbat. It’s unclear whether the mall has to abide by those laws since it is on state-owned land.
As the mall was progressing, the bigger-better mentality landed Don Ghermezian in a bind. He put $2.2 million into a glass wall meant to expose the water park, in all its glory, to other mall passersby. But then he realized his mistake, he told an audience in the same YouTube video.
The see-through wall might ruin the fun for a “frum kid” who could inadvertently catch a glimpse of girls in bathing suits.
“How could we let that happen?” Don said at the party. “For us, the most important thing became very quickly, ‘What would Hashem want us to do?’”
He had large green palm fronds painted on the glass to obstruct the view.
The mindset extends to philanthropy. The Ghermezians donate to Jewish cultural and educational institutions, in addition to dozens of secular charities.
“The Ghermezian family, we’ve always tried our best to be as supportive as we can to our institutions,” Don said in a video filmed for his children’s school.
Xanadu Roller Coaster
American Dream is built on land owned by the New Jersey Sports and Exposition Authority in the same complex as the New York Giants’ MetLife Stadium. The state picked the original developer, the Mills Corporation, who named the site Meadowlands Xanadu but later went bankrupt. Investment firm Colony Capital bought the property in 2009, but construction was halted by the collapse of Lehman Brothers, a lender.
Talks with Related Companies about joining the project came to a dead end, and a group of lenders led by Credit Suisse eventually foreclosed on the $2 billion site, which was nearly complete.
With hundreds of millions in taxpayer incentives, the Ghermezians rescued the development in 2011 and introduced their signature flair. They added the ice rink and climate-controlled indoor water and amusement parks under glass domes with views of the Manhattan skyline. The mall opened eight years later, only to be shut down during Covid.
American Dream lost $245 million between 2021 and 2022, the Bergen Record reported. It faced lawsuits over unpaid bills and injuries. The Ghermezians are locked in a legal battle with the borough of East Rutherford over its property tax assessment. The borough also sued the mall owners in 2023 over payments in lieu of taxes on several of the properties surrounding the mall. And Bergen County is now exploring a lawsuit to fight over the Sunday operations, according to nj.com.
“We have a dynamic. The conversations can take unpredictable twists. Some of them are harder conversations and some are just like, ‘Hey, great to see you guys. How was your vacation?’”
Triple Five also has lenders to deal with. The $1.7 billion construction loan, from a group that includes JPMorgan and Goldman Sachs, is backed by a 49 percent stake in the family’s other malls. The Ghermezians got a four-year extension in 2022 and could soon be looking for another.
“Ultimately, I expect that if there is an improvement in operations but not sufficient enough to refinance out, that they are going to try to do a significant extension that is going to turn this into a permanent loan because they see a trajectory to eventually getting out,” Chopp speculated. “For better or for worse, the lenders are partners with Triple Five.”
The company also borrowed $1.1 billion from the municipal bond market and payments to bondholders have fallen behind. After months of delays, bondholders received a $26 million distribution in August to cover a portion of the $46 million of interest they were owed, according to Bloomberg.
The bonds, which are backed and paid out by the New Jersey Economic Development Authority, again failed to pay their interest in February. The bonds are tied to sales tax collection at the mall and account for about $287 million of the municipal debt. The authority did not respond to a request for comment about exactly how the payments work.
As they head to the negotiating table, the Ghermezians have one major bargaining chip: There are only a handful of companies equipped to operate American Dream. Those include giant REITS like Simon Property Group and Brookfield Properties — not the tiny borough of East Rutherford.
“If I sue them for taxes and I end up with it, what am I gonna do with it?” East Rutherford Mayor Jeffrey Lahullier said.
Retail comeback
There is light at the end of the tunnel for the Ghermezians. Shopping centers are making a comeback. Demand for retail space is exceeding supply and vacancy has reached 5.4 percent for the first time in two decades, thanks to a dearth of new construction and the shuttering of low-performing properties, according to a Cushman & Wakefield report.
American Dream is feeling the effects of the retail renaissance. Stores like Gucci, Balenciaga and Saks Fifth Avenue have set up shop in its luxury wing known as the Avenue. The mall has added more than a dozen dining options and attractions since the 2023 holiday season. And foot traffic was up 11 percent year over year in 2024, according to data from Placer.ai.
Sales reached $553 million in 2023, a 31 percent increase from a year earlier but still far below the $2 billion projected in a 2017 study, according to Bloomberg. Gross sales totaled $176 million in the last quarter of 2024, according to the most recent municipal bond filing.
“The bottom line is that the mall generally is much improved, particularly in the entertainment and middle-end offerings,” Maryland-based retail consultant Nick Egelanian said. He was less confident about the luxury wing.
Triple Five recently brought on a new firm to handle luxury leasing.
“It will be tricky to find the appropriate mix for the New Jersey submarket American Dream appeals to, even with strong sales from a few leaders like Hermès,” Egelanian said. “A lot will become clearer in the next 12 to 18 months.”
A new wave of international visitors is expected next summer when the World Cup comes to MetLife Stadium. Paul says it will be American Dream’s “debutante ball.” In a way, every day is a coming-out party as the mall adds stores and attractions, each one more elaborate than the last.
The golf cart kept going: through the Avenue, past the Hermès and Belanciaga and around the Jonathan Adler sculptures topped with giant topiaries. A group of tourists took photographs of life-sized white bison sculptures inside the Gentle Monster eyewear store. But some storefronts await tenants behind drywall painted with flowers and giant flamingos.
“There’s a lot of stuff going on behind the barricades,” Paul said.
The Ghermezians are counting on more customers to make the trek to New Jersey, despite competition from Manhattan and nearby Paramus Park. It isn’t a sure thing they’ll beat the financial odds, but the signature Ghermezian swagger has gotten them this far.
“I think the greatest thing is just coming in and walking the place,” Paul said. “We’re looking at something that’s going to stand the test of time and it’s going to be here, and we’re constantly evolving what that is.”