Is 100% Occupancy Required? American Dream’s Unusual Legal Defense Triggers $25M Tax Battle
the staff of the Ridgewood blog
EAST RUTHERFORD, NJ — A high-stakes financial battle between New Jersey municipalities and the American Dream megamall may finally be reaching a turning point.
Local officials across the Meadowlands region contend that the 3.5 million-square-foot shopping and entertainment complex owes roughly $25 million in unpaid municipal taxes and PILOT-style fees—while the mall’s owners argue a controversial legal technicality excuses them from paying.
The “100% Leased” Loophole: How the Controversy Began
At the center of the dispute is an unusual legal defense: lawyers for the mall’s developer, Canadian firm Triple Five, argue that American Dream is not obligated to make payments until the complex is 100% leased.
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Mall Occupancy: Public filings show the complex was 88% leased as of April 2026.
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Industry Reality: Real estate experts note that achieving 100% occupancy is virtually impossible for modern megamalls due to retail turnover and market shifts. High-performing malls typically top out in the high-90% range.
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Municipal Stance: Local leaders argue the mall has been open and generating revenue since October 2019, when it received a temporary certificate of occupancy and opened its indoor ice rink and theme park.
“The developers have created a convenient barrier to avoid paying what they owe,” stated Carlstadt Mayor Robert Zimmermann. “It is a cynical maneuver designed to indefinitely withhold funds that are critical to our community’s operations.”
Breakdown of Money Owed to Bergen & Hudson County Towns
While East Rutherford has fought the issue directly in court, surrounding Meadowlands towns assert they are owed millions through 2004 and 2012 regional agreements facilitated by the New Jersey Sports and Exposition Authority (NJSEA).
| Municipality / Agency | Alleged Amount Owed | Status / Details |
| East Rutherford | ~$15 Million | Court ruled in favor of borough; settlement vote pending. |
| Carlstadt | >$5 Million | Claimed via joint press release by local mayors. |
| Secaucus | $966,666 | Claimed via joint press release by local mayors. |
| 11 Surrounding Towns (Little Ferry, Lyndhurst, Moonachie, North Arlington, Ridgefield, Rutherford, South Hackensack, Teterboro, Jersey City, Kearny, North Bergen) | $387,500 each (~$4.26M total) | Outstanding regional payments designated under NJSEA agreements. |
American Dream executives maintain that the 2004 and 2012 payment structures were nonbinding recommendations rather than enforceable agreements for towns outside East Rutherford.
Key Settlement Vote Expected in September
A major resolution may be on the horizon. The NJSEA Board is scheduled to vote on a potential global settlement during its Sept. 24 meeting.
Superior Court filings indicate that legal representatives for both the state agency and East Rutherford Mayor Jeffrey Lahullier are actively working toward terms to settle back-monies owed to the host borough.
A Mountain of Legal Headaches for American Dream
The $25 million tax dispute is just one of several legal battles facing the entertainment complex:
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Investor Lawsuits: In early 2026, bond investors sued the mall and East Rutherford, alleging collusion to lower property values by $800 million.
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Bergen County Blue Law Dispute: Paramus and other entities have challenged the mall for staying open on Sundays, while American Dream argues state-owned Meadowlands property is exempt.
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Patron Personal Injury Suits: Dozens of liability claims remain ongoing, ranging from water park structural incidents to injuries caused by motorized rental toys.
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