Summer 2024 Newsletter: The American Dream Mall
In February, Nancy and I had a couple of extra hours and decided to check out the American Dream Mall in East Rutherford, New Jersey. One can see it from the Turnpike near the Meadowlands Stadium.
Mills Corporation started planning to build a super mall in 1996. After years of environmental delays, traffic delays, and credit delays, ground was finally broken in 2004. In 2006, a subsidiary of Simon Property group took over from Mills. The first six tenants announced in 2007 were to be Cabela’s, a concert hall, an upscale movie theatre, bowling alley, along with stores Forever 21 and Children’s Place. We didn’t notice any of those stores during our visit. Then the great recession kicked in, and there was no flood of tenants waiting to sign up.
Triple Five Group entered the picture in 2011. The principals are the Ghermezians, owners of the Mall of America, the US’ largest and a very successful Mall in Minnesota. They pledged to put $1 billion into the property. With their backing, tenants started to commit.
So, what is it like today? It is the largest mall in the US. It’s a shopping experience if there ever was one. Every name brand seemed to be represented.
The stores are surrounded by a water park, a skating area, an indoor ski hill, a Nickelodeon theme park and probably several more leisure activities that I don’t remember. There is a 2-story over-the- top candy store. Signs on the wall proclaim: “5 out of 5 Dentists recommend sugar” and “It’s sugar, part of an unbalanced diet”. No lack of disclosure there!
In the luxury store area, hallways are filled with oversize sculptures, elaborate plantings and murals.
We were there on Monday, President’s Day 2024. The ski hill and other amusements were busy as you might expect. Otherwise, there was light traffic in the hallways and stores. In February, there were still a good number of empties. Our mall observations, including the successful King of Prussia Mall in Pennsylvania do not square with a June 11, 2024 New York Times article titled: “Shopping Centers are going from Vacant to Vibrant.” Yeah, they have installed water parks, pickleball courts and other recreational facilities, but the basic fault is that retail seems to be overbuilt now that so many people are shopping online.
The calculus of high rents, high employee wages, shrinkage(theft) have increased the complexity of operating a retail business profitably. People still like to leisurely browse, but there’s not much that is unique to see or to buy anymore. In 1961, if you wanted to Breakfast at Tiffany’s, you had to visit 5th avenue in New York City. Today, you can be in St. Louis, Missouri or Skokie, Illinois and find a Tiffany store.
Nevertheless, the American Dream Mall is worth checking out. It is unique, creative, and a tribute to the American real estate developer.
_________________________________
TABASFUNDING provides funds in the form of loans from $50,000 to $750,000 to entrepreneurs who want to expand or acquire businesses. We will look at other business situations which require capital, effort, management, and patience. It will take a while to find out who the winners are in the current environment. If you think you have one, and need funding, please contact me directly at 610-896-2400 or Lee@TABASFUNDING.com.
_________________________________
LEE TABAS is available as a Director, Trustee, and Consultant. With 30+ years of business, entrepreneurship and banking experience, Lee can be helpful with ideas, policies and second opinions. Available for short-term or permanent assignments. Please call 610-896-2400 or email Lee@TABASFUNDING.com for further information.