Many regular Minnesota Commercial Property Tax Appeals Blog readers are familiar with the Triple Five Group. The Edmonton, Canada-based retail development company owns the Mall of America in Bloomington and the West Edmonton Mall in Canada.
Back in the pre-pandemic days of 2019, Triple Five put its Mall of America property up as collateral as it pushed to complete its American Dream entertainment and retail complex in New Jersey.
Scheduled to open in March of last year, American Dream was to have a waterpark and indoor skiing attraction. The project was to have a number of high-end retailers, anchored by Lord & Taylor and Barney’s.
Then the pandemic hit. The official mall opening was rescheduled for October 2020. Anchors Lord & Taylor and Barney’s declared bankruptcy.
Consequences of default
According to financial statements, Triple Five missed months of payments on a $1.2 billion construction loan before it defaulted. As a result, banks now own 49 percent of Mall of America and an equal amount of West Edmonton Mall – and they reap 49 percent of revenue from the mega-malls as well.
MOA vice president of communications Dan Jasper told Twin Cities Business that despite setbacks, there’s reason for optimism. He said mall traffic is growing and that new stores and attractions are debuting.
‘Whatever it takes . . . ‘
According to the publication, Bloomington’s commercial tax revenue dropped 9 percent last year. Because MOA is easily the city’s biggest taxpayer, Mayor Tim Busse says he’s “in favor of whatever it takes to keep Mall of America relevant.”
Despite the mayor’s warm words, the city last year shelved plans to issue $260 million in bonds to finance an MOA waterpark.
Slow to bounce back
Deb Carlson, a director on commercial real estate services firm Cushman & Wakefield’s retail team is the counter to Jasper’s optimism. She says malls are rebounding slower from the pandemic than strip malls and neighborhood retail.
“Malls weren’t working terribly well before the pandemic,” Carlson told Twin Cities Business. “So how do we make them work now? If you had to be creative before, you really have to be creative now.”