American Dream Mall Sees $800M Drop in Property Value Amid Leasing Woes and Tax Disputes

the staff of the Ridgewood blog

East Rutherford NJ, the American Dream megamall, the second-largest mall in the United States, is facing financial and legal headwinds in 2025 as its assessed property value dropped by over $800 million, or 24%, according to local tax officials.

Property Value Plummets as Vacancy Rate Looms

For the current 2025 tax year, the mall’s assessed land value fell to $2.5 billion, down from $3.3 billion just a year earlier. The reassessment comes as the mall, which occupies 3.5 million square feet in the Meadowlands, continues to struggle with tenant occupancy and meeting revenue projections.

East Rutherford Tax Assessor James Anzevino noted that the 87% lease rate played a key role in the valuation drop. The mall has appealed its property tax assessment every year since opening in 2019.

Taxpayer-Backed Incentives and Bond Challenges

American Dream was built with more than $1 billion in tax incentives, grants, and bonds. The assessed property value directly affects PILOT (payment in lieu of taxes) obligations that fund bond repayments. With a lower valuation, bond trustees may need to dip into reserves to make full payments, Bloomberg News reported.

Grand Vision Meets Harsh Reality

Despite housing an indoor ski slope, water park, theme park, Ferris wheel, and hundreds of retail outlets, the mall has not reached its full leasing potential — and has not delivered on its once-promised $2 billion revenue target. In 2024, the mall generated $643 million in gross revenue, an increase from $422 million in 2022, but still far short of expectations.

Legal Battles Over Taxes and Leasing

American Dream is no stranger to courtrooms. It is currently embroiled in multiple property tax disputes, including one where it claims it overpaid $183 million in tax obligations due to being assessed at values higher than all other regional malls combined.

A Bergen County judge ruled in March that the mall was fully operational and therefore liable for $13 million in payments to East Rutherford. Meanwhile, eight surrounding Meadowlands towns say they’re owed a combined $8.6 million from the mall.

Mall developers argue the property should not be considered fully open until it reaches 100% leasing, a benchmark experts say is nearly impossible to achieve or maintain.

Over-Malled and Underperforming

Real estate experts blame New Jersey’s saturated retail market. “We’re over-malled,” said Charles Cristella of JLL, noting that the average lease rate for malls statewide is 88–92%.

“For every Short Hills, you have a Livingston,” he added, referencing the struggling Livingston Mall in contrast to the upscale Short Hills Mall — both located in Essex County.

What’s Next for American Dream?

Despite its troubles, some analysts remain optimistic. The mall has hosted major events like a Jonas Brothers concert and is positioning itself to play a key role in the 2026 FIFA World Cup, which will bring global attention to the region.

Ongoing Lawsuits and Blue Law Disputes

In addition to tax battles, American Dream faces lawsuits for personal injuries, unpaid bills, and potential litigation for violating Bergen County’s blue laws, which prohibit nonessential retail from operating on Sundays.

Expert Insight

“It’s clear that their expectations of the economy…have compromised their planning,” said Marc Pfeiffer, assistant director at Rutgers University’s Bloustein Local Government Research Center.

Bottom Line

With declining property value, multiple legal disputes, and less-than-expected revenue, American Dream is navigating a critical period. Whether it can turn the tide may depend on improved leasing, event programming, and a broader economic upswing.

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