The American Dream megamall in New Jersey is facing a tax dispute that could cost its owners tens of millions of dollars as local municipalities demand payments for services rendered.
A sprawling retail complex owned by Triple Five is currently being sued by multiple surrounding towns in the Meadowlands. East Rutherford officials say the mall owes them roughly $15 million, while Carlstadt claims it is owed more than $5 million. Secaucus is seeking $966,666, and eleven other municipalities are each asking for $387,500, according to a joint statement from local officials in July.
The payments are meant to come through the New Jersey Sports and Exposition Authority, which owns the land beneath the mall. Agreements signed in 2004 and 2012 stipulated that American Dream would send money to the authority for distribution to the towns. The authority stated it has received no payments from the project to date.
The core of the dispute is a disagreement over when the mall became liable for these payments. The owners argue that money isn’t due until the complex reaches 100 percent occupancy. Public filings indicate the mall was 88 percent leased as of April, and retail experts suggest hitting 100 percent is a moving target for any major shopping center.
East Rutherford officials disagree. They believe the clock started in October 2019, when the mall held its opening ceremony for the ice rink and theme park and received a temporary certificate of occupancy. A judge ruled last year that the mall was technically open and owed the borough money, though Mayor Jeffrey Lahullier noted that none of the funds have actually been paid.
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Triple Five’s chief marketing officer, Adam Petrick, disputes the framework entirely. He stated that the agreements are essentially nonbinding recommendations and argued the mall has no obligation to municipalities where it isn’t located.
The project, already mired in lawsuits from bondholders and patrons, now faces a financial hurdle that could complicate its operations further. While a settlement between American Dream, East Rutherford, and the NJSEA could resolve about $15 million of the dispute as soon as September 24, the broader fight with the other municipalities continues.
Triple Five faces significant financial pressure. The company has sought a temporary restraining order against the municipalities to block the tax collection, arguing the leases are still active despite the ownership dispute. This legal maneuver attempts to halt the collection efforts while the company appeals the court’s ruling on the temporary certificate of occupancy.
Triple Five also faces an uphill battle regarding the property tax assessment. The developer has filed a lawsuit in state court to challenge the valuations set by local assessors. The company claims the assessments are inflated and do not reflect the current market conditions. This legal action is separate from the service payments but represents another attempt to lower the financial burden on the project.
