AT: Dean Lamanna
NEW YORK, N.Y. — With the promise of the Manhattan skyline as a backdrop, the decade-plus-old East Rutherford, N.J., construction site that by early 2019 will be home to American Dream — a sprawling destination retail-entertainment center — hummed back to vigorous life last summer.
The renewed activity accompanied an announcement in June that Triple Five Worldwide, the multifaceted real estate development group based in Edmonton, Alberta, Canada, that created West Edmonton Mall and Mall of America in Bloomington, Minn., completed $2.77 billion in construction financing through the sale of $1.1 billion in bonds.
That news marked the culmination of several years of ceaseless effort by Don Ghermezian, president of Triple Five, which his family founded in 1972 and still manages together. But it represents just one of several major hurdles he’s cleared to realize what for him and his extended clan — and, he hopes, for the New York / New Jersey metro area — truly is a dream.
The project, located on state-owned land in the Meadowlands Sports Complex and known as Meadowlands Xanadu before Triple Five took over it in 2011, wields impressive stats: Three million square feet. Some 23,000 permanent jobs. Acres of theme park rides and waterslides in addition to more than 450 stores. A projected 40 million visitors annually.
Triple Five pioneered the highly experiential “retailtainment” template for American Dream 36 years ago with West Edmonton Mall. Mall of America, which is celebrating its 25th anniversary this year, is the largest integrated indoor amusement and shopping complex in the U.S. Expansions are in the works at both.
As of August, American Dream was about 80 percent leased, and planning approvals also were well underway for the 225-acre American Dream Miami, which will be Triple Five’s fourth destination mega-mall in North America. “It’s still several years out, but there’s a lot of demand for the Florida project,” Ghermezian told Amusement Today. “We’re happy with the progress we’re making there.”
For now, it’s all about New Jersey for the executive, who spared a few moments to share his enthusiasm for American Dream and his family’s business traditions.
Where does your sense of retailtainment “showmanship” come from?
It comes from the top down. When my father and his three brothers came to North America [from Iran] some 50 years ago, they were visionaries. They didn’t leave their families to come here to do anything small. They wanted to be able to create memorable projects, and that’s what they’ve done.
And that’s how we were raised. When you’d come to the office every day and see the level at which they were operating and the things they were trying to pull off — the world’s largest shopping mall, the world’s largest indoor water park — those are monumental tasks. And to grow up in an environment where you’re watching that type of thing, it sinks in, and you sort of gravitate toward it.
How complicated an undertaking has American Dream been?
When the opportunity came to do American Dream — I guess the name says it all! — in this market, it was not one we were prepared to pass by. It’s a generational, once-in-a-lifetime type of opportunity to have a location and a project of this magnitude. We jumped all over it.
With American Dream, prior to our involvement, the timing was off. It was almost 80 percent built and almost 80 percent leased [by former project owner Mills Corp.] when the capital market collapsed in 2008-09, and some of the lenders went bankrupt. If not for that, it likely would have opened successfully.
In terms of the complexities, they are, quite frankly, enormous. The consensus out there was this project was crazy, but everybody believed that if it could be pulled off, it could very well be the most successful retail-entertainment center in the world, given its location. The reason we were able to do it is because we’ve done it before. Mall of America is one of the most successful centers in the world, generating between 35-40 million visitors a year. And West Edmonton Mall is one of the top ten-grossing centers in North America when there’s only about a million people who live in Edmonton; it generates that much tourism for the city.
We spent almost two years just conceiving of what American Dream needed to be in order to succeed in this market. Once we had a vision, we started speaking to various brands and retailers — and they jumped on pretty quickly.
How did you determine which amusements should be added to the mix?
I take my kids all around the world, and I tell them to go to every single attraction. The ones they like the best, and the ones I like the best, are the ones we generally go after. It’s not rocket science but it has always worked for us. [laughs]
We’re a privately owned company. When we first set out to build West Edmonton Mall and Mall of America, my father and his three brothers took all of us around the world — riding rides and experiencing experiences. The attractions we thought were the best were the ones we tried to bring into our centers.
It’s about bringing multiple concepts together. And because of the market you’re in, you’ve got to be top-in-class of everything. It’s got to be the best theme park, the best water park, the best indoor ski hill. And you have to combine it with the best retail.
When they think about doing entertainment, other developers add restaurants, movie theaters, bowling alleys, arcades. American Dream will have those things, but I don’t include them on the list of 14 major entertainment components it will have.
American Dream will be between 52 to 55 percent entertainment and the balance retail. We have so much demand for both the retail and entertainment space that I’m actually turning away entertainment concepts. I’m able to be very particular about who I do a deal with.
You’ve announced partnerships with DreamWorks, Merlin Entertainments and other major companies for American Dream. How do you decide which brands and IPs are best for your properties?
We want to be associated with top-tier brands. Nickelodeon, for example, was a no-brainer for us; they’re phenomenal to work with. They have a great relationship with Mall of America, so when the opportunity arose for a Nickelodeon Universe theme park in our New Jersey project, we went after them.
The DreamWorks indoor water park concept was something we sort of created. When I approached [DreamWorks cofounder] Jeffrey Katzenberg with the idea, he liked it. And we negotiated a deal very quickly because he appreciated the world-class stage we would put his brand on here in the New York/New Jersey market. And we have water park experience, obviously, at West Edmonton Mall, which has one of the top indoor water parks in the world.
What we’ve tried to do is think about what brands can we bring to this market. Merlin doesn’t have a Sea Life aquarium here. KidZania doesn’t have a single family entertainment center in North America. Same with a DreamWorks-branded water park. Those environments and attractions don’t exist in Manhattan or Brooklyn or Queens or the Bronx. We wanted concepts that would compel New Yorkers and tourists to come to us in New Jersey.
You’re putting the best of life under one roof…
That’s exactly what we want this center to become. We want it to be everything to everybody. And we’ve been very successful in putting together the right pieces so that it can become that. A lot of it is based on our experience with Mall of America and West Edmonton Mall.
Are you reserving space for some of the newer amusement technologies, such as virtual reality (VR)?
Aside from the entertainment concepts we’ve announced for our American Dream projects in New Jersey and Miami, there are multiple concepts we’re creating with various entities — whether with Hollywood movie studios or VR companies from different parts of the world. And if there are unique ideas we’ve got in our minds, we’ve worked on creating those concepts, as well.
Our VR concept, we think, will be unrivaled. I have gone through just about every VR experience there is, and I’ve become incredibly selective as to the partner we’ll bring in. With so many concepts and developers out there, finding the best of the best is not easy. But this is where the world is headed, and VR will be a very strong focal point of American Dream.
Has the migration of retail toward the internet impacted your business model?
Not as much as I imagine it’s impacted other [mall] developers. Our two existing centers are between 15 to 20 percent entertainment and 80 percent retail. A lot of the entertainment concepts we have in both are powerful enough to draw customers, and our experience has been that they end up shopping.
With online shopping and how it impacts centers, it’s a lot easier to buy shoes or clothing when you’re sitting at home. But what makes us unique is that you can’t go to a water park or a theme park online. You can’t go to a Cirque du Soleil show online, or a ski hill or an ice rink or an aquarium.
So we haven’t been affected, really. We’ve got enough good deals in the waiting; if a tenant goes bankrupt countrywide, we’re able to replace that tenant in short order.
On the development side, is your project commitment and focus ever tested by community impatience, media criticism or political pressure?
Not in the least. When we set out to build American Dream, we, as a family, had a vision of what it needed to be in order to succeed as the next generation of retail and entertainment. This caliber of project doesn’t exist anywhere in the world. We took our time to make sure we did everything right.
We knew there would be naysayers, negative publicity and bad articles, but we are full of conviction. People are just afraid of the competition, and how much of a game-changing project this will be to the retail landscape of North America. As long as I was able to sign deals, quietly, behind the scenes, I knew I’d one day come to a point where the project was 80 percent leased and all financing was in place.
How supportive have the local and state governments been with American Dream?
Both have been extremely supportive, as has the New Jersey Sports and Exposition Authority [NJSEA] and everybody we’ve dealt with. Once they understood exactly what it was that we were working to bring to New Jersey, the support levels from the governor on down were right where we needed them.
We thank NJSEA, the New Jersey Economic Development Authority and East Rutherford for their assistance in the bond sale.
How does being a family-founded business inform your operations and extensive global philanthropy?
We’re Orthodox Jewish. Most important for us is our religion and our family values, so everything emanates from there. We’ve got a very strong moral compass; everything we do is at the highest level, the highest moral caliber.
We do all that we can to work with our partners and tenants, regardless of the position they are in or we are in. You’d be hard-pressed to find anybody out there that will tell you that, when they dealt with the Ghermezian family, they had anything other than a really great relationship and experience. That’s very important to us.
This article appears in the November II 2017 issue of Amusement Today.
