The multi-billion dollar American Dream Meadowlands project remains open — increasingly so, as COVID-related capacity restrictions ease — in the wake of last week’s financial news about major shifts in the ownership stakes related to the project.
If all goes well from here, consumers will never even notice a difference. And if a dreamed-of casino and convention center complex ever gets added to the Meadowlands Sports Complex mix, the project might even thrive.
But for the extended Ghermezian family, it’s difficult to imagine things ever quite being the same, now that a group of real estate investors is exercising its claim on 49% of the Mall of America in Minnesota and the West Edmonton Mall in Alberta, Canada.
That’s because there are very personal reasons behind the project name.
One-time family patriarch Jacob Ghermezian, a rug merchant born in the 1920s into a country then known as Persia, moved to Canada in the 1950s with his four sons who would one day create a North American empire via a company known as Triple Five.
Its 5.3-million-square-foot West Edmonton Mall was an international tourist attraction, and the Ghermezians kept dreaming bigger. That’s how they took over the Mall of America in 2003.
The Dream before the Dream
But the Mall of America was a preexisting mall, already a proven success. What the family really wanted was a place of its own — a place that by the 1990s reflected the family’s migration from Canada to its neighbor to the south.
That’s why the Ghermezians attempted to build its first American Dream — a project of that name in Silver Spring, Md. — even before it took control of the Mall of America.
Acrimonious disputes over the extent of public tax subsidies for the project ultimately torpedoed the plan, but the family kept looking. Then, a decade ago, opportunity knocked at the Meadowlands.
The Xanadu entertainment and retail project, first approved in 2003 with a 2-million-square-foot shell being built a few years later, had fallen on hard times in the aftermath of the 2008-09 recession.
Incoming Gov. Chris Christie, eager to see a massive temporary and permanent jobs plan move forward, formally welcomed the Ghermezians to the site in 2011.
Dozens of Ghermezian family members were on hand for a press conference inside the facility, and questions from the press were met with answers from members of the family on the podium and in the audience.
Christie quipped that each question would subsequently be answered by a different family member. When the press went on a guided tour of the facility, Ghermezians from young children to grandparents came along for the walk.
Xanadu no more
The project was reimagined by the Ghermezians, with a massive indoor water and amusement park project to match the one in their West Edmonton Mall. An indoor snow park — the first of its kind in North America — was refurbished, and the original interior as a whole was gutted while the Ghermezians added another 25% to the total square footage in what it promised was just “Phase One” of the Dream.
By the mid-2010s, the family’s dream was in place — except for the pesky detail of obtaining billions in construction loans to finish the job.
That finally happened in 2017, with a catch. A real estate group that included JPMorgan Chase and Goldman Sachs agreed to float the company $1.7 billion, on the condition that should the company default, the lenders could claim 49% stakes in Mall of America and the West Edmonton Mall.
For the Ghermezians, this was a risk worth taking. Family members practically glowed as they spoke with media members about the pending completion of American Dream. Nader Ghermezian — one of the children who arrived from Iran in the 1950s — liked to ask if they had ever imagined such a magnificent structure.
The complexity of construction and obtaining the necessary permits proved daunting, but the project — long derided as a multi-colored “elephant” by locals — managed a limited opening in October 2019. The indoor amusement park and an NHL-sized ice rink took on visitors, although the water park, the skiing, and the shopping would have to wait. The November 2019 water park opening was scrapped, but the snow park and a few stores opened soon enough.
The pandemic, and a dream tarnished
Then came disaster: the COVID-19 pandemic that exploded in March 2020. A project that took 17 years from the original proposal until a revamped version opened its doors got only a few months before it had to shut down for several months.
Owners of countless stores would rethink their plans, and promised lease payments did not come. Without the expected revenue, Triple Five couldn’t afford to pay its own bills.
“It would have been much better if American Dream would have burned down or a hurricane had hit it, financially, because we would have been covered by insurance,” Kurt Hagen, a Triple Five executive, told a Bloomington, Minn. city council meeting several weeks ago. “This pandemic that we didn’t see coming has not been covered and is the worst scenario imaginable.”
The project has since partially reopened, and in the fourth quarter of 2020, Triple Five reported $39 million in revenue — triple what it had taken in for the year’s first nine months.
That sent municipal bond buyers into a feeding frenzy, and that painted an optimistic picture for the project.
But ultimately, the lenders’ patience ran out — and now half of the Ghermezians’ beloved projects has landed in other hands.
The whole saga is a reminder that “the American Dream” means an opportunity to chase after your grandest ambitions. It just doesn’t come with any guarantees.