American Dream Faces $25M Tax Fight With Meadowlands Towns
The American Dream mall’s tax bill is piling up as Meadowlands municipalities claim the sprawling mall owes them roughly $25 million as its owners fight over when the complex became liable for local payments.
A settlement between American Dream, East Rutherford and the New Jersey Sports and Exposition Authority could resolve about $15 million of that dispute as soon as next month, NorthJersey.com reported. The NJSEA, which owns the state land beneath the mall, is expected to vote on proposed settlement terms Sept. 24.
The fight centers on an argument from American Dream’s owners: they contend payments aren’t due until the 3.5 million-square-foot complex is fully leased. That threshold remains elusive — the mall was 88 percent leased as of April, according to public filings — and retail experts say 100 percent occupancy is effectively a moving target for any major shopping center.
East Rutherford officials, meanwhile, argue the clock started in October 2019, when American Dream 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 about $15 million, but Mayor Jeffrey Lahullier said none of the money has been paid.
The dispute extends beyond the borough. Carlstadt says it is owed more than $5 million, while Secaucus claims $966,666. Eleven other municipalities — including Little Ferry, Lyndhurst, Rutherford, Jersey City and North Bergen — are each seeking $387,500, according to a July 30 joint statement from local officials.
The payments stem from agreements signed in 2004 and 2012 under which American Dream was supposed to send money to the NJSEA, which would then distribute it to surrounding towns. The authority said it has received no payments from the mall.
American Dream, owned by Canadian developer Triple Five, disputes that framework. Chief marketing officer Adam Petrick said the agreements are essentially nonbinding recommendations and argued the mall has no obligation to municipalities where it isn’t located.
The tax dispute adds another headache for a megaproject that has faced lawsuits from investors, patrons and nearby municipalities.
In February, bondholders filed a lawsuit alleging the owners of the American Dream megamall and the Borough of East Rutherford colluded to slash the mall’s assessed value. The lowered assessment is claimed to have gutted Payments in Lieu of Taxes (PILOT) backing roughly $800 million in bonds.
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