It was March 16 — just three days ahead of the grand opening of dozens of retail stores at the American Dream megamall in New Jersey — when the 3-million-square-foot complex shut down due to the coronavirus pandemic.
Ongoing construction was halted. Attractions, like a Nickelodeon Theme Park that opened in the fall and an indoor ski slope that opened during the winter, were closed. And a VIP event to celebrate the debut of the DreamWorks Animation Water Park was called off. Triple Five Group, the property's owner, hoped it would be a short delay — just another in a series of setbacks the project has seen over its nearly two-decade-long history.
Thursday morning, Triple Five tries again.
Almost seven months later, American Dream is finally swinging open its doors to the public. Visitors will be able to purchase tickets to attractions including an NHL regulation-size ice rink, an indoor ski slope and an Angry Birds-branded mini golf course. Retailers including Zara, Lush, Primark, Aritzia and American Eagle, will also open there for the first time.
The Covid-19 pandemic has upended the retail industry: It has pushed dozens of companies into bankruptcy court and resulted in thousands of layoffs. It'Sugar, which boasts a towering candy store next to the water park at American Dream, filed for bankruptcy protection last month. A location planned in the megamall's luxury wing for Barneys New York, which liquidated after filing for bankruptcy last year, must still be filled.
These tenants' troubles affect Triple Five, which also operates the Mall of American in Minnesota.
The property owner has struggled to pay its own bills during the pandemic. Triple Five remains more than 90 days delinquent on its $1.4 billion mortgage for Mall of America, according to Trepp, a New York-based research firm that tracks the commercial mortgage-backed securities market. The value of the mall was recently reduced to $1.94 billion from $2.3 billion, Trepp said. And Triple Five actually used Mall of America, the largest U.S. mall, as collateral for an American Dream loan.
American Dream co-CEO Don Ghermezian told CNBC in an interview in early April, shortly after the megamall was shut: "The difficulty we are going though now ... if tenants don't want to pay rent, my response is: 'I have got to pay a mortgage. I borrowed money. I have got to pay back my lenders.'"
A spokeswoman for Triple Five told CNBC this week: "We are making positive progress with our lenders, and reopening American Dream is another step forward."
With Thursday's grand reopening comes hope for fresh revenue. American Dream's owners are betting on restless parents bringing their kids to ride roller coasters for the afternoon, with their masks on. They're betting on nearby New York residents hopping over on the train to complete their holiday shopping, albeit socially distanced. New Jersey, which is home to some of the best-performing malls in the country, doesn't have anything quite like American Dream, which sparks some optimism.
"If you're going to go one place ... post-Covid with your family, first, you want to go somewhere where you feel safe," Mark Ghermezian, co-CEO of American Dream and Don's cousin, said during an interview from the complex earlier this week. "Our whole thing is, if we can get people to come in to buy tickets and come to experiences, then our shopping and food will flourish."
Even as spending picks up online at a record clip during the pandemic, instilling new and permanent consumer behaviors, American Dream is still betting big on brick-and-mortar retail, though the mall skews heavier on entertainment tenants.
"We believe, if you're going to choose to go shopping somewhere, you're going to go somewhere that's new and fresh and exciting and different," Mark Ghermezian said.
"I think this [pandemic] is just going to accelerate what's happening" in retail, he added. "What I mean by that is, a lot of the C- and D-player malls or C- and D-store concepts, right, may not be around for much longer. It accelerates the value of our centers and what we're doing."
American Dream will put Triple Five's model of touch-and-feel experiences alongside retail to the test.
"We don't view ourselves as a shopping center," Mark Ghermezian said. "We're a destination."
The pandemic has prompted Triple Five to put in place a number of safety precautions. Capacity at the center will be capped at 25%, to allow for social distancing. Facial coverings are required — unless you're going down one of the water slides. Visitors to the Nickelodeon Universe Theme Park and DreamWorks Water Park will have their temperatures checked through thermal body scanners. Operating hours will be reduced. And fresh signage throughout the mall is embellished with its new "#DreamSafe" motto.
The retailers at the megamall will open on a rolling basis, according to the Ghermezians. The luxury wing, which includes a sprawling Saks Fifth Avenue department store, Gucci, Hermes and Louis Vuitton, is now slated for a March debut.
Many of the food options are still being completed and are expected to open up this year or next.
But the industry's turmoil is ongoing, on pace to rival 2010, when 48 retailers filed for bankruptcy coming out of the Great Recession, according to BDO USA. The professional-services firm tracked 18 retailers filing for Chapter 11 protection during the first six months of 2020, followed by another 11 from July to mid-August.
Many of the tenants at American Dream and Mall of America have been looking for breaks on rent, due to the pandemic, which caused prolonged store closures, according to Triple Five. And while rent collection appears to be ticking back up, tensions between tenants and their landlords persist industry wide, likely lasting into 2021.
And so as American Dream reopens with retail Thursday morning, it will go head to head with a some nearby shopping malls in New Jersey, including Brookfield's Paramus Park and Westfield Garden State Plaza.
"They were thrown a number of obstacles, but you've got to give them credit, as this is maybe their third try," said Mark Hunter, managing director of retail assets for the commercial real estate services firm CBRE. "You've got to take a step back and say, 'There are not too many developers that would have the wherewithal to pull this off.'"