November 30, 2023

The Queens County Citizen

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The U.S. project of a Canadian megamal developer is on the verge of being shaken by the epidemic

The U.S. project of a Canadian megamal developer is on the verge of being shaken by the epidemic

VIP cocktail parties, DJs, dancers, fashion shows, balloons and much more – the opening day of the so-called American Dream at the Canadian-owned US Megamall is planned for maximum impact and excitement.

The project, based in New Jersey, is nine years across the bridge from Manhattan, and was built at the West Edmonton Mall and Mall of America in Minneapolis, while the other two famous destinations belong to the wealthy Germzian family of Edmonton. .

All three properties combine retail stores with amusement park attractions. Approximately three million square feet of American Dream includes 450 retailers such as DreamWorks Water Park, Angry Birds Mini Golf, Legoland and Indoor Ski Slopes and Lewis, Sephora, H&M and Zara.

However, the March 19 grand opening did not take place. Instead a world pandemic happened. The venue was closed on March 16, along with all casinos, gyms and movie theaters in the state.

Now an October 1 reopening is planned, but it comes in the midst of a financial crisis.

The mortgage has not been paid since March

Germazians’ entertainment / shopping platforms are integrated into a three-pronged financial arrangement that shows signs of weakness.

To finance American Dream, the family has mortgaged both the Triple Five Group, West Edmonton Mall and the Mall of America. According to Trep LLP, a data company that tracks commercial mortgages, Triple Five has lost payments on a $ 1.4 billion U.S. Mall of America loan since March. The financial situation at West Edmonton Mall is unclear.

“The Germazians have a very complex business empire, and the shopping centers are part of it, but we do not have all the information because it is a privately owned company,” said Nick Egelanian, a retail consultant in Annapolis, Maryland. Close to Triple Five’s gambling. “But this situation seems to be able to keep all the features by default.”

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Goldman Sachs and JPMorgan Chase, two New York-based investment firms that helped set up construction loans for the Germagians, declined the CBC News request.

Lineups for ski hill

Germazian family members are not even talking. A spokesman said they were “too busy” with the new October 1 grand opening plan for the American Dream. The chief creative officer of the forum, Ken Downing, conducts media interviews, and he emphasizes that all is well.

“The team is very excited,” he said in an interview from Manhattan. “We want to re-introduce and re-open to the public and we want to do it the right way.”

See | Dianne Buckner toured the American Dream Megamall under construction in 2018:

Dernne Buckner reports about the latest massive project from the Germazian family 5:39

The launch of American Dream is expected to take place in stages, and some attractions will actually open in late 2019. Retailers and the rest of the theme park’s attractions are originally slated to open with a bang in March. Currently, access to the entire megamal due to COVID is limited to one-fourth of its capacity.

“I don’t think you can find a lot of big projects like ours that haven’t been touched by COVID,” Downing said.

He pointed out the only attraction that reopened the indoor ski hill on September 1 this year and said people were waiting before 8:00 a.m. with their skis and snowboards. “People love that ski slope,” Downing said. “It’s busy with 25 percent capacity.”

Snowboarders and skiers filmed at the Big Snow opening last December. The attraction was closed in March due to the epidemic and reopened on September 1st. (Seth Wenig / The Associated Press)

Even before the financial disaster of the pandemic, there were many doubts about the knowledge of opening a new mall amid the climate identified by multiple major retailers. Bankruptcy protection or cancellation of assets. In addition, there are already enough malls in the state, said Jeff Tittel, of the New Jersey chapter of the environmental group Sierra Club. He says there is no way to solve the American Dream financial difficulties for the three assets of the Germazians.

Wrong place, wrong time

“People who go to New York City want to go to the Radio City Music Hall or the Empire State Building,” he said. “They’re not getting on the bus and coming to New Jersey.”

The Sierra Club has opposed the American Dream from day one because of its impact on the wetlands of the region. “It was always in the wrong place at the wrong time,” Tittel said.

But the Germezian family – a patriarch who came to Canada from Iran in the 1950s and built a fortune in real estate development along with a triple five in real estate development with the help of his four sons and now grandchildren – is not easily discouraged.

Dan Germagion of Edmonton’s Triple Five Group is on site to build the 2018 American Dream Megamal in New Jersey. The West Edmonton Mall, owned by his family, was used as a collateral to help build funding in a financial setting that now appears to be moving due to COVID-19. (Joan Castell / CBC News)

In the late 1990s, they spent four years fighting a lawsuit brought by the Alberta Treasury Board and were successful. Before the West Edmonton Mall and Mall of America were built, it was doubtful that those venues would ever work. Both of the top tourist attractions have been very successful.

The future of malls

Steve Rappaport, a New Jersey commercial real estate broker who specializes in retail leasing, says the talk of malls becoming doom is off-base.

“People love to congregate,” Rappport said. “It’s always more than just shopping in a mall. They’m places where people go for a morning mall-walk, and teenagers go there after school.”

Manhattan view from Triple Five Group offices in New Jersey next to American Dream. (Joan Castell / CBC News)

He believes that profitability at American Dream is hard to come by, but he said there is no doubt that Germazians will be on this course. “Suddenly I don’t think everything they say is gone and give the keys back.”

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However, there is the issue of mortgages. Delayed payments on nearly $ 4 1.4 billion in debt are no small matter.

Manus Clancy, managing director of Trep LLP, said everything sticks to lenders.

“Should they assess whether the borrower wants the property, and do they have the financial capacity to pursue the matter? Or would it be better to seize the property and find a new team to run it?”

Some in the industry believe that only Germazians have the experience of running exclusive destinations such as American Dream, West Edmonton Mall and Mall of America with a distinctive mix of retail and theme park attractions.

Clancy does not believe.

“We have big players in the US like Simon and Brookfield; there are also people who are candidates because they are high-end mall operators in the US,” he said if lenders lose faith in Triple Five Group.

In Edmonton, Percy Woods, executive director of the Building Owners and Management Association, has confidence in the family.

“They may have a PhD in dealing with financial conditions,” he said. “They always come out okay. They ‘ve been very smart. And they’ been very successful.”

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