Town alleges Triple Five Group owes payments in lieu of taxes
By: TRD Staff
Borough of East Rutherford Mayor Jeffrey Lahullier and Triple Five Group’s Don Ghermezian with American Dream Mall (East Rutherford NJ, Google Maps, Getty)
Months after East Rutherford appeared to be gearing up to collect on money it felt was owed by the Ghermezian’s Triple Five Group at the American Dream mall, the New Jersey borough has come knocking.
East Rutherford claims the mall owners owe $7.5 million on tax-like services and $400,000 for sewer service, according to a suit filed last week in the Superior Court of New Jersey reported by Bloomberg.
Triple Five agreed to make payments in lieu of taxes on the land surrounding the mall in exchange for the rights to build offices, a hotel and a minor league baseball stadium, according to the lawsuit. The town says the payments were supposed to begin when the mall opened.
But the sides have been feuding about what that actually means. The complaint says the mall owners “dubiously asserted” the complex isn’t open to the general public, despite the fact that visitors are streaming in and out on a daily basis. Triple Five has previously said “fully opened” means 100 percent occupied, a lofty goal for a property that regularly seems to miss various debt payments.
A spokesperson for the mall said it would fight the lawsuit.
The mall reported $422 million in gross sales last year, a 38.4 percent increase from 2021. Still, that pales in comparison to the $2 billion once projected for its first full years of operation, which was hampered by the onset of the pandemic.
Two lenders filed last month a lawsuit alleging a breach of contract by Triple Five, filed by an administrator representing Western Asset Management and South Korea-based Nonghyup Bank. The lawsuit seeks $389 million on behalf of the firms, which claim they were cut out of a recent debt extension on $1.7 billion in construction financing.
Also last month, Triple Five missed an $8.8 million seminannual debt service payment for interest due on $290 million in municipal bonds. The mall owner claimed — and not for the first time — that the state was responsible for releasing the funds to make the payment.
The mall was also forced to close the DreamWorks Water Park indefinitely after a decorative helicopter display fell, injuring four people.