The American Dream mall in New Jersey is the subject of yet another lawsuit, but developer Triple Five Group isn’t the defendant this time.
Denver-based PCL Construction is suing JPMorgan Chase for more than $30 million the manager claims it is owed for unpaid work and interest, Bloomberg reported. In the lawsuit filed in New York federal court last week, PCL is targeting the bank because it arranged the construction loan and serves as the administrative agent of the developer.
PCL said the developer is responsible for paying the bill, but due to financial duress, the obligation falls on JPMorgan to pick up the check instead.
When JPMorgan led a consortium to lend $1.7 billion for the construction of the East Rutherford retail and entertainment complex, the lender agreed to step in for the developer’s affiliate if the entity failed to pay the construction manager, according to the suit.
The developer has tried to dodge paying what is owed by claiming there are construction defects, according to the lawsuit. Those claims are also being used by JPMorgan as a reason not to pay PCL, the suit added.
The developer last year received a four-year extension on the construction loan.
Problems for the Ghermezian family’s megamall have been plentiful. A judge recently ruled that the mall needed to pay a pair of lenders nearly $390 million after the default-related case from Western Asset Management and Nonghyup Bank of South Korea wasn’t contested.
Read more
Commercial
Tri-State
American Dream mall debtor must repay $390M: judge
Commercial
Tri-State
American Dream angles for $1.7B payment extension
Commercial
Tri-State
American Dream down to its last reserves
Bondholders and the mall’s surrounding towns have increased the pressure, including lawsuits regarding money allegedly owed under development agreements. It took longer than expected to build the $6 billion mall, only for it to open under the cloud of Covid; in 2021, it reportedly lost roughly $60 million. Last year, it made $422 million in gross sales, far below a forecast of $2 billion for its first full year of operations.
As of the end of March, the mall was 84 percent occupied.
— Holden Walter-Warner