Dive Brief:
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American Dream, owned by Canadian mall developer Triple Five Group, missed another $8.8 million debt payment. Last year, the mall initially missed an Aug. 1 deadline, due to insufficient funds.
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The reserve account tapped for payments made in August 2021 and February 2022, again had insufficient funds to make a payment due Wednesday, according to a notice to bondholders from U.S. Bank Trust Co. As of Feb. 1, the balance was $878.50.
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Bondholders last year also received a notice of default on interest payments. Neither American Dream nor Triple Five Group immediately responded to requests for comment.
Dive Insight:
With the traditional enclosed shopping center in decline, mall developers and operators are scrambling to reimagine the model.
Generally, they are diversifying, by introducing non-retail tenants like medical offices, entertainment venues or residential units. Some malls are ditching the department store anchor concept, while some department stores, notably Macy’s, are ditching the mall.
For American Dream, the emphasis is on entertainment and over-the-top experiences, including an indoor ski slope. But the project, already years behind schedule, has had a string of bad luck. It was shut down due to the pandemic, not long after it finally opened. The next year a three-alarm fire kept the ski slope out of service for weeks. Ultimately the mall lost $60 million in 2021.
Also that year, after a default on debt tied to American Dream, a group of lenders that included J.P. Morgan seized a stake in Triple Five’s Mall of America in Minnesota, which was collateral on American Dream’s debt.