Developer Triple Five expects construction activity to return to American Dream in September
LYNDHURST -- American Dream Meadowlands took a step toward completion Thursday when a state board approved a $1.1 billion financing plan for the troubled project.
The New Jersey Sports and Exposition Authority voted to authorize a bond sale to the Public Finance Authority of Wisconsin, which will then sell bonds to investors.
The $1.1 billion bond sale, coupled with $1.5 billion in private financing, should help developer Triple Five resume work on American Dream as early as September, executives say. The site has sat idle since April, when the developer ran into trouble securing funding.
Triple Five will repay the bondholders in revenue from the completed mall. The state is allowing American Dream to forgo up to $350 million in money that would otherwise go toward paying sales tax to instead repay the bonds.
The mall will repay the other $800 million to bondholders through a payment in lieu of taxes (PILOT) agreement with East Rutherford.
The same agreement will see American Dream pay East Rutherford more than $150 million over the first 20 years of the project, including $23 million up front.
"From an East Rutherford standpoint we'll be seeing the benefits right away," Mayor James Cassella said.
The bonds are non-recourse, meaning New Jersey taxpayers won't be on the hook if American Dream fails, Robert Tudor, bond counsel for the sports authority, said. However, critics of the deal said the state would be responsible for additional traffic, emergency and infrastructure costs and no extra revenue to cover those costs.
"Instead, all those future PILOTs and sales taxes are going to be mortgaged to bondholders," Bruno Tedeschi, a spokesman for the New Jersey Alliance for Fiscal Integrity, said.
The non-profit advocacy group was formed to oppose taxpayer backing for American Dream.
The project has received the backing of union officials, who say construction will put thousands of laborers back to work.
"We need this done, we need this done now so the members of the Bergen County Building trades can get back to work," Rick Sabato, president of the Bergen County Building and Construction Trades Council, said.
Tony Armlin, senior vice president for development for Triple Five, expects construction activity to return to American Dream in September. Financing should wrap up by the end of the month and the work is expected to finish in summer 2018.
Armlin said the Wisconsin Public Finance Authority, which Triple Five has worked with before, would approve the bond deal next week and would issue bonds quickly after that.
Triple Five has spent $600 million on the project to date, while prior developers spent $500 million each. Combined with a $1 billion state investment in land, highway improvements and tax breaks, the total cost of the project will push $5 billion upon completion.
Myles Ma may be reached at mma@njadvancemedia.com. Follow him on Twitter @MylesMaNJ. Find NJ.com on Facebook.