After decades of puzzling together the ultimate mega mall, the American Dream is dying. CNBC reports that while the mall was able to make its most recent bond payment of $9.3 million dollars, it nearly emptied its reserve bank account. After their most recent payment, there is currently only $820 remaining in their account. With their next payment due on August 1st, it’s not certain whether they can afford to make it through the rest of the year. The good news for American Dream is that the “failure to make a payment on the sales tax debt doesn’t constitute a default nor require the borrower to pay back the loan immediately.” The bad news is a lack of transparency from the mall, with “Trimont Real Estate Advisors saying American Dream wasn’t complying with obligations under the bond documents to provide updates on project costs and performance.” The project still faces billions of dollars in debt.
While sales were solid in the first three quarters of 2021 (over $220 million), it’s nothing in comparison to what the mall thought they were going to get in their initial estimates in 2017 ($2 billion). The mall currently features an indoor ski area, an amusement park themed to Nickeolodean characters, an indoor water park themed to Dreamworks, a Ferris wheel that will open soon, a Toys R’ Us revival store, an ice skating rink, and more. The mall is currently 77% leased, and an additional 5% is under negotiation.
One of their main attractions, BIG SNOW American Dream, has struggled as well. The early months of the Covid-19 pandemic caused it to close temporarily, and a fire on their roof back in September has closed the slopes indefinitely. The indoor ski area is hoping to reopen soon, but supply chain issues are stalling their progress.
The loosening of pandemic restrictions, along with the opening of more shops and restaurants in the space(about one hundred more are planning on opening this year) could help them weather the storm. While the Triple Five Group has two strong assets, the West Edmonton Mall and the Mall of America, the company previously defaulted on payments has led to banks owning a large chunk of those properties. But if we dip into another pandemic or an economic funk this summer, the American Dreams days may be numbered.