Sunday, October 27, 2019

Can Ghermezians' Dream Come Through Again


I was wrong.

Well, not exactly wrong. More like, overly pessimistic about the potential for the Mall of America to fulfill its dream.

Back in September 1992 I editorialized in Chain Store Age the August opening of the Mall of America in Bloomington, Minn., was a Herculean feat that would be hard pressed to attract at least 40 million visitors a year to achieve its financial goals. At the time, 27 million people lived within a 400 mile radius of the retail and entertainment complex. It was not uncommon for Iowa farmers to travel hundreds of miles to visit the Twin Cities to shop Dayton’s, the local department store. The Mall of America with its indoor amusement park, varied dining and entertainment venues and hundreds of retail stores banked on its uniqueness to draw crowds, especially during harsh northern winters when family recreation options were limited.

Fast forward to 2019. Mall of America’s website affirms the dream has become a reality. It proudly boasts more than 40 million visitors a year.

Now, the people who dreamed up Mall of America, and before that the West Edmonton Mall in Canada—the Ghermezian family of the real estate firm Triple Five Group—have placed another big bet, aptly titled American Dream, that a huge, multi-faceted retail and entertainment complex could transform the New York metropolitan area’s spending patterns. Last week it began a months-long phased opening extravaganza of American Dream in the Meadowlands of New Jersey, in the shadow of MetLife Stadium where the New York Giants and Jets play football and concerts are held. Aside from more than 300 stores (currently not open), American Dream features a water park, ski slope, ice skating rink and an amusement park with a roller coaster (https://nyti.ms/2Nblh8v).

American Dream was not a Ghermezian dream from the outset. Originally named Xanadu, the mall was conceived by The Mills Corporation more than 15 years ago. Repeated financial setbacks stymied construction for Mills and subsequent developers. For more than a decade its semi-completed skeleton was a poster-child example of excess consumerism. The Ghermezians bought the concept in 2011.

They have invested heavily in transportation plans to bring New Yorkers the 10 miles across the Hudson River, one of the most densely traveled paths in the country, be it by bridge or tunnel. Just miles from Newark airport, shuttle buses may take travelers to the mall. Already it is common for foreigners to make excursions to Woodbury Commons, an outlet center some 60 miles north of the airport. American Dream is less than 15 miles from Newark.

Unlike the Mall of America, American Dream has a much larger population pool from which to draw visitors. Attracting the 40 million-plus customers a year the Ghermezians say are needed seems possible, even with the more varied entertainment and shopping options available in the New York metro region. But, more to the point of attaining a solid financial return, American Dream is located in Bergen County which prohibits retail sales on Sunday. It is hard to turn a profit in a location that cannot process retail transactions on one of the busiest shopping days of the week.

Bottom line—American Dream probably won’t turn into a nightmare, but I doubt it will provide contented sleep to the Ghermezians.

No comments:

Post a Comment