The owners of the mega-mall American Dream are defaulting on a loan. Lenders to take equity interests in its other properties.
The lenders behind the American Dream mega-mall project are set to take a 49% stake in two more malls owned by developer Triple Five that have been used as collateral for a $ 1.2 billion construction loan in New Jersey, the Financial Times reported, citing people involved in the case.
The outstanding loan is largely owned by JP Morgan, as well as Goldman, Starwood Capital, CIM Group, Soros Fund Management, Wafra and iStar. The restructuring, the Financial Times reported on Friday, was due to end as early as “this week”, although the process was complicated by the number of lenders and could be delayed.
An American Dream spokesperson declined to comment.
The cash flow crisis to American Dream was revealed earlier this month when Kurt Hagen, senior vice president of development for Triple Five, told a joint meeting of Bloomington, Minnesota city council and its port authority that the pandemic had created a “very large cash flow crisis” for American Dream and that collateral collection was “likely to occur”.
Hagen described the pledge as an indirect interest that does not include any assets or property of the Mall of America. “It just means that once we get back to profitability, 49% of that profit will go to American Dream’s lenders until that collateral is released,” Hagen said.
The developer also filed a complaint against a potential tenant for breach of contract because he failed to open two restaurants. And construction companies have deposited nearly $ 41 million in privileges against Triple Five, claiming they are owed for the work done at the site.
American dream to close last March, three days before the opening of its DreamWorks water park and retail business. He does not have reopen until October 1 and currently has eight attractions and 130 stores in operation. And other openings are planned, in particular for its Sea Life aquarium and its Legoland discovery center, which should start May 4.
“Not opening and not being able to generate cash for six months created very significant problems,” Hagen said at the public meeting.
Triple Five also defaulted on its Mall of America mortgage when it closed. This lack three payments of $ 7 million on his mortgage of $ 1.4 billion. The Canada-based developer reached a deal with lenders in August to avoid foreclosure on the Minnesota property and the account was brought the current from December.
The pandemic and ensuing financial problems are just the latest hiccups in the development of the Meadowlands, which has been in the works for almost 20 years. Triple Five is the third developer to take over the project, initially known as Xanadu.
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Allison Pries can be reached at [email protected].