American Dream Owners Ghermezians Miss Payment

The municipal bonds that finance the Ghermezian family’s American Dream Mall failed to pay their February interest, Bloomberg reported.

The bonds are tied to sales tax collections and the bonds account for $287 million of the municipal debt used to finance the Triple Five Group project.

The issuer of the bonds, the New Jersey Economic Development Agency, is responsible for making the payments to bondholders.

“The trustee can provide no assurances of when and in what amounts future grant revenue payments will be made,” trustee US Bank said in a filing disclosing the missed payment.

A spokesperson for American Dream and Triple Five did not respond to requests for comment from the Commercial Observer.

In August, bondholders received a $26 million distribution in grant revenue from the state, covering a portion of $46 million of interest that was past due. Payments from the grant agreement are only due once a year.

The construction of the East Rutherford mall was financed in part with $287 million worth of municipal bonds. For two years, though, bondholders sat and waited to recoup some of that as payments were repeatedly missed on the debt. Triple Five didn’t technically default on the debt, though.

The unrated bonds are backed by New Jersey economic development grants; funds are linked to tax revenue from sales at the mall.

At the end of last year, Triple Five picked a fight with the town of East Rutherford, arguing the company overpaid $183 million in taxes to the municipality. Triple Five is appealing its property tax value, while East Rutherford is suing the Ghermezian ownership over missed payments.

That dispute centers around the land upon which the mall sits. The land’s been assessed at more than $3 billion, but the mayor of East Rutherford claims Triple Five is arguing the land is only worth half as much.

Correction: A previous headline incorrectly stated that Triple Five missed bond payments.

— Holden Walter-Warner