Is The American Dream (Meadowlands Edition) Alive And Well?

The investment community is forecasting sunny times ahead for the entertainment/retail complex. Could success pave the way for a casino?
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The Meadowlands Sports Complex is home to what, since 1976, has been commonly seen as the most iconic harness racing track in the world.

And for almost three years, the track’s FanDuel Sportsbook and its mobile sports betting partnerships with FanDuel and PointsBet have made it the leading revenue producer in the U.S. on that front.

Then there’s MetLife Stadium, the only stadium to host a pair of NFL franchises — the Giants and Jets — whose fans were able to place bets legally even in the midst of games at the site during the 2018 and 2019 seasons.

But even with all that gambling going on, the biggest risk of all arguably has been taken by the operators of the other facility operating on the grounds: the multi-billion-dollar American Dream Meadowlands project.

That’s because Triple Five, in its zeal to guarantee a generations-old immigrant family dream of opening a project with that grandiose phrase, a few years ago elected to put its massive Mall of America in Minnesota up as collateral.

The dream — well, the opening, anyway — came true in October 2019 after eight years of Triple Five’s expensive efforts to salvage and expand on the ill-fated Meadowlands Xanadu predecessor, whose roots date back to 2002.

The COVID-19 blues

Of course, even the partial opening achieved at the 2.9 million square foot project — which includes an indoor amusement park, an NHL-sized ice skating rink, and a first-in-North America snow park — was sideswiped along with so much in the world in March 2020 due to the pandemic.

While Triple Five officials tried to put their best face forward, the investment community was more pessimistic.

Just a few months later, The Bond Buyer noted, “Three missed mortgage payments on another megamall property operated by the owners of the bond-financed American Dream development have investors concerned whether the large-scale New Jersey project can withstand the lengthy closure caused by the COVID-19 pandemic.”

One municipal bond expert noted, “Many bondholders would like to sell, but can’t find buyers.”

Late last summer, The Real Deal warned, “Bondholders behind The American Dream Mall in New Jersey could be in for some pain.”

Come on up for The Rising?

But as brutally blunt as the investment community can be, it also gives it plenty of credibility when it forecasts sunnier times ahead — such as Bloomberg News’ analysis last week of the current state of affairs at American Dream Meadowlands:

“Municipal bond buyers are wagering on a big recovery for the American Dream.

“Bonds issued for the mall and entertainment complex in New Jersey’s Meadowlands have returned more than 20% so far this year as consumers come back and investors snap up the riskiest securities.”

The reason? A surprisingly strong fourth quarter performance, with $39 million in sales that represented 75% of the sales volume for the entire year.

The billion-dollar bond issue for the American Dream project four years ago makes it “the biggest fish in the sea” for national fund managers who want to convert their optimism about a post-COVID-19 U.S. economy into better yields.

(For the investor class: “The longest maturity American Dream bonds have delivered 25.8% this year, almost 10 times the return for junk and non-rated municipal bonds, according to data compiled by Bloomberg. On [Feb. 18], $5 million American Dream bonds with a 7% coupon maturing in 2050 traded at 111.7 cents on the dollar to yield 4.94%. In September the same securities traded at 87 cents to yield 8.2%.”)

More than just shopping is a key

And with an entertainment vs. retail square footage ratio that is now shifting from percentages of 55-45 toward 70-30, that makes investors who are not so bullish on the future of brick-and-mortar retail likely feel less skittish about the project.

An indoor water park and a pair of miniature golf courses have been added to the entertainment mix, and more is likely coming in the next six to 12 months.

In fact, “Coming Soon!” according to the the project’s website are Legoland Discovery Center, a London Eye-style observation wheel, SealLife Aquarium, Kidzania, The Escape Game, a ClimbZone, and the New Jersey Hall of Fame.

The overall project — with free parking and general admission but with fees for the various entertainment offerings — is now open from 11 a.m. to 7 p.m. daily, except for until 9 p.m. on Fridays and Saturdays.

And to close with a return to gambling, a successful American Dream Meadowlands project could well entice lawmakers down the road to try to “double down” on the venerable almost-in-Manhattan site with a world-class casino and convention center.

The 750-acre complex has room for such a structure, and a rail link to Secaucus Junction that can deliver tourists from New York City with no need for a car or a ride-share.

But for now, local leaders are focused more on seeing American Dream Meadowlands survive what have been hard times before they expect their own dreams to come true.

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