LYNDHURST — The troubled American Dream Meadowlands mall, where work halted in April due to a financing shortfall, may begin moving next month towards eventual completion, thanks to a decision Thursday by a state board which approved a $1.1 billion financing plan.
The New Jersey Sports and Exposition Authority voted to authorize a bond sale to the Public Finance Authority of Wisconsin, which will then sell bonds to investors.
NJ.com reported that the $1.1 billion bond sale, coupled with $1.5 billion in private financing, should help developer Triple Five resume work on American Dream as early as September, executives say.
Triple Five will repay the bondholders in revenue from the completed mall. The state is allowing American Dream to forgo up to $350 million in money that would otherwise go toward paying sales tax to instead repay the bonds.
The mall will repay the other $800 million to bondholders through a payment in lieu of taxes (PILOT) agreement with East Rutherford.
The same agreement will see American Dream pay East Rutherford more than $150 million over the first 20 years of the project, including $23 million up front.
American Dream started out 14 years ago as Xanadu. It was supposed to open in 2006, then 2008, then 2009, then 2010, then 2014, then 2016, then 2017 and now 2018.
“From an East Rutherford standpoint we’ll be seeing the benefits right away,” Mayor James Cassella said.
The bonds are non-recourse, meaning New Jersey taxpayers won’t be on the hook if American Dream fails, Robert Tudor, bond counsel for the sports authority, said. However, critics of the deal said the state would be responsible for additional traffic, emergency and infrastructure costs with no extra revenue to cover those costs.
“Instead, all those future PILOTs and sales taxes are going to be mortgaged to bondholders,” Bruno Tedeschi, a spokesman for the New Jersey Alliance for Fiscal Integrity, said.
The non-profit advocacy group was formed to oppose taxpayer backing for American Dream.
The project has received the backing of union officials, who say construction will put thousands of laborers back to work.
“We need this done, we need this done now so the members of the Bergen County Building trades can get back to work,” Rick Sabato, president of the Bergen County Building and Construction Trades Council, said.
Triple Five has spent $600 million on the project to date, while prior developers spent $500 million each. Combined with a $1 billion state investment in land, highway improvements and tax breaks, the total cost of the project will push $5 billion upon completion.
‘American Dream’ gets a $1B bonding boost, sales tax break
