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6 facts about American Dream mega-mall everyone often gets wrong | Opinion

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The mayor of East Rutherford, where American Dream is located, wants to clarify the facts after a state senator recently criticized the project's financing in an opinion piece.

By James Cassella

In the long, tortured history of the giant mall and entertainment center in the Meadowlands known now as the American Dream the ire and hopes of citizens and government officials have risen and crashed many times. 

As the mayor of East Rutherford, the home of American Dream, I'm frequently surprised about how ill-informed government officials at all levels are about the finances related to this project and its developer, Triple Five.

I want to correct some falsehoods and misperceptions about the project that have been floating around. Most recently, State Sen. Michael J. Doherty (R-Warren) presented an inaccurate picture of what the state's level of investment is for the American Dream.

1) There is no risk to New Jersey taxpayers. The financing of the non-recourse bonds to complete the project will be sold by a Wisconsin state agency. Financing originally issued by a state Economic Development Agency grant will be paid off by splitting the 7 percent sales tax with the developer --allowing Triple Five to use half the sales tax to pay down the EDA grants
 
2) There is no such thing as a $1 billion state subsidy. That figures comes from the estimated sales tax revenue generated at $100 million a year over a decade. During that time, the developer gets to keep half of that revenue to pay off the financing bond. 
3) The state stands to make at least $500 million over the first 10 years in sales taxes. The state will also receive additional tax revenue generated from the construction jobs and the permanent jobs created at the American Dream. 
 
4) The American Dream is built on state property -- which is managed by the N.J. Sports & Exhibition Authority. It cannot be taxed by East Rutherford.
 
5) There is only one way East Rutherford can get revenue from this project. That's through an agreement made between the municipality and Triple Five. The agreement is governed by the state-statute that regulates the NJ Sports & Exposition Authority and its Payment in Lieu of Taxes (PILOT) program.
 
6) PILOTs do not deprive school districts of tax revenue. The fact is that school districts do not collect revenue - municipalities do. The revenues collected from the American Dream PILOT will go into a pool of funds used to pay school, municipal and county taxes.


Consider these other facts:

Under the arrangement that I helped negotiate with Triple Five, the borough will make out quite well, starting with a $23 million lump sum upfront payment from the developer.

Once the mall is open, the borough will receive a PILOT of $2.5 million a year escalating over time to $7 million a year. Most importantly, we provide no services, such as policing and emergency services, to the mall.

As a mayor, I'll gladly take $7 million a year from a site that is currently producing zero dollars -- and so would every mayor in Doherty's district.  

Doherty: N.J. shouldn't have to cough up $1B to American Dream

I must also point out that no one in East Rutherford sought the mega mall. But since it is here, I am doing everything I can to make sure that my community derives every possible benefit from the American Dream. 

I've been the mayor here for more than 20 years. And I've been involved with every incarnation of this project over the last 15 years. If anyone wants to get the facts about the financing of this project, they can simply give me a call.   


James Cassella is the mayor of East Rutherford.

Follow NJ.com Opinion on Twitter @NJ_Opinion. Find NJ.com Opinion onFacebook.

 

 


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