American Dream Fails To Make $8.7 Million Bond Payment

EAST RUTHERFORD, NJ — American Dream developers failed to make an $8.7 million interest payment on a revenue bond, due to "insufficient funds," a notice regarding nonpayment of dues said Monday.

Ameream, the Triple Five company that owns American Dream, missed the payment on the limited obligation bond issued by the Public Finance Authority to provide for development of the mega-mall and entertainment complex.

U.S. Bank, acting as the trustee, said, in the notice, that it had "not received any revenues for payment of the Aug. 1 debt service," and a reserve account for the purpose of making such payments is absent sufficient funds.

Set forth June 1, 2017, the indenture between PFA, as the issuer, and the trustee states that payment on the $287 million bond is due from the mall semi-annually. The reserve account was previously drawn to make those payments on Aug. 1, 2021, and Feb. 1, 2022, yet, as of Monday, the balance of the account stood at $862.12, the notice said.

Failure to make the payment does not constitute a default; it does, however, constitute a "notice event," in accordance with a continuing disclosure agreement, the notice said.

An American Dream spokesperson said in a statement that the mega-mall has no financial obligation to make payments to bondholders. Instead, bondholders are paid from sales tax generated from the project that are paid to the state, which appropriates funds to make the payments.

"We have made all necessary submissions to the New Jersey Economic Development Authority," the spokesperson said. "... and we believe the state has appropriated funds in the budget to make bondholder payments."

The nearly $290 million in debt is backed by a New Jersey economic development grant, the "cost certification" for which, the NJEDA said, is still under review.

"We are working through the iterative process of requesting clarifying information and supporting documentation," NJDEA Press Secretary Mariluz Garcia-Diaz said in a statement.

Gov. Phil Murphy's office could not immediately be reached for comment.

American Dream owners have faced a number of financial stability challenges, which were only exacerbated by the coronavirus pandemic and the fact that the mall remained closed for much of that period, Patch previously reported.