American Dream Mall Ordered to Pay $13M in PILOT Fees to Meadowlands Towns

the staff of the Ridgewood blog

East Rutherford NJ, a Bergen County judge has ruled that American Dream Mall was fully open for business when it welcomed visitors in 2019, delivering a legal victory to Meadowlands municipalities seeking $13 million in unpaid payments-in-lieu-of-taxes (PILOT).

This decision is a major step in a legal battle between East Rutherford, Carlstadt, and other North Jersey towns against the megamall, which they claim has failed to meet its financial obligations.

Judge Rules American Dream Was Open in 2019

In a ruling issued Friday, Superior Court Judge William Soukas determined that American Dream was officially open when it began operations in 2019. This directly contradicts the mall’s argument that it never reached 100% occupancy and was therefore not fully operational.

The decision means American Dream must now pay millions in PILOT fees, which were negotiated as part of its agreement to operate on tax-exempt state-owned land.

“This is just baby steps for us,” said East Rutherford Mayor Jeffrey Lahullier, emphasizing that the ruling strengthens the towns’ case for the overdue payments.

What American Dream Owes North Jersey Towns

Breakdown of Unpaid PILOT Fees

📌 East Rutherford:

• $7.5 million in unpaid PILOT fees
• $400,000 in unpaid sewer fees

📌 Carlstadt:

• $4.2 million in unpaid fees since 2019

📌 Other Meadowlands towns (Little Ferry, Lyndhurst, Rutherford, South Hackensack, Moonachie, North Bergen, and Secaucus) were also promised annual payments based on a 2011 agreement:

• Carlstadt: $750,000 for the first two years, increasing to $1 million by year five
• Other towns: $50,000 initially, increasing to $75,000
• Secaucus: $100,000 for the first two years, rising to $200,000 annually

These payments were meant to compensate the municipalities for hosting the massive retail and entertainment complex on tax-exempt land.

Why American Dream Disputed the Payments

American Dream’s owner, Triple Five Group, argued that the mall never reached full occupancy, and therefore, PILOT payments were not yet due.

However, Judge Soukas’ ruling clarified that the agreement required payments to begin once the mall opened to the public, regardless of whether every retail space was leased.

American Dream’s Leasing Struggles

📌 Mall’s current occupancy rate: 87% (as of July 2023)
📌 Industry experts say 100% occupancy is nearly impossible
📌 Tenant turnover is common due to market shifts and bankruptcies

Despite its challenges, the mall remains packed on weekends, said Secaucus Mayor Michael Gonnelli.

American Dream Fighting Back: Claims It Overpaid Taxes

In a separate lawsuit, American Dream claims it overpaid East Rutherford by $183 million in property taxes and is now seeking a refund.

📌 Mall’s assessed value: $3 billion
📌 American Dream’s argument: Property is worth only $1.5 billion

The legal battle over these payments is expected to continue, as Triple Five pushes back against the PILOT ruling while trying to recover what it claims were excessive tax payments.

What’s Next?

🔹 American Dream may appeal the judge’s decision
🔹 Towns are pushing for immediate payment of overdue fees
🔹 The dispute over property tax overpayment remains unresolved

With billions invested and millions in payments at stake, the legal showdown between American Dream and local municipalities is far from over.

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