It\’s been 16 years since the American Dream mega-mall began development in the New Jersey badlands of East Rutherford, hulking over the New Jersey Turnpike like a metal and concrete pterodactyl. During that time, owners have come and gone, the State of New Jersey has cowered under the weight of over $1 billion in incentives and bonds . . . and the shopping center industry has fundamentally and forever changed.
Now, Triple Five Group, the current developer and owner of the famed Mall of America near Minneapolis, has promised a firm opening date of October 25 . . . no doubt to capture the all-important holiday season and essential Black Friday activity. So it\’s fair, at last, to provide an appraisal of what American Dream offers and whether it remains a viable concept in today\’s fast-changing retail sector.
In short, is the consumer marketplace in late 2019 in need of another three million-square-foot enclosed behemoth in an isolated location off the NJT with a local populace consisting largely of Giants fans and concertgoers frequenting events at nearby MetLife stadium?
Mall Models
In the course of the last decade and a half, shopping center developers have been running as fast as they can away from the original \”enclosed mall\” formula to a much more eclectic mixed-use concept, where shopping (and even dining) are only one part of a much broader range of attractions. Today, the most successful retail developments are embedded within newly hatched communities which incorporate residential apartments, commercial offices, large volumes of outdoor recreation space and transit links to urban city centers. In fact, they don\’t feel like malls at all.
American Dream affords none of these options. Instead, it has been modelled on the original 1950s enclosed mall concept . . . although one writ extremely large. It will offer:
- Two indoor amusement parks – one themed Nickelodeon and the other Dreamworks
- A ski and snowboard park as well as an NHL-size ice rink
- An Angry Birds 18-hole miniature golf course
- A Sea Life aquarium
- A Legoland Discovery Center
- A \”giant observation wheel\” overlooking the New York skyline (a page out of Hudson Yards\’ Vessel book – only facing the opposite direction
- In addition, there will be two food halls, one kosher and one not, a luxury movie theater (now de rigeur) and over 20 full-service restaurants…together with a vast assortment of retail options.
Are you convinced yet? According to Triple Five, a bevy of prestige brands have drunk the Kool-Aid. Confirmed tenants include Saks Fifth Avenue, Barneys New York, Gucci, Hermes, Tiffany, Dolce Gabbana and Moncler. And there is the predictable roster of mid-range brands including Zara, Lululemon, Gap and H&M. Triple Five, along with its presumptive retail tenants, are anticipating both a regional and global clientele – locals from suburban Bergen County (an area already drastically overstored), day-trippers from the five boroughs of NYC and global tourists to the Big Apple seeking an over-the-top experience.
The American Dream Proposition
What will be the outcome of 16 years of planning and $5 billion in investment by Triple Five and its backers? I believe there are two divergent points of view:
- American Dream is bringing exciting new mall attractions to the U.S. which have already proven themselves as game changers in other parts of the world.
The indoor ski village concept has been successfully pioneered in the Middle East, where the ski village installation at Dubai\’s Mall of the Emirates draws thousands of visitors a year. In fact, it is actually a major profit center in its own right. Likewise, a multi-level aquarium at the nearby Mall of Dubai packs in visitors along with an Olympic-size skating rink in the heart of the center. And Triple Five\’s own success with its gigantic amusement park at Mall America has contributed to that property\’s position as one of the highest-drawing shopping centers in the country, if not the world. So, if today\’s consumer truly values experience over acquisition, American Dream will provide it in spades. - Triple Five is placing a huge bet on revitalizing an outdated shopping center model – and turbocharging it.
Today\’s consumer increasingly prefers to spend quality time socializing with friends in an eclectic and intimate downtown setting — and ordering apparel and other necessities (including food) online. By locating American Dream in a virtual wasteland, without easy transit or pedestrian access, Triple Five is bringing challenging traffic barriers into play. And the enormity of the setting, as well as the dizzying array of entertainment options, can dilute customer footfall and conversion opportunities for any one retailer or restaurant.
The original mall concept dating back to the 1950s was \”build it and they will come.\” Draw a large enough volume of visitors into a concentrated area and some percentage (however small) will find its way to each tenant. Almost 70 years later, this model has been turned on its head. Consumers would rather spend time enjoying life in personalized settings than travelling to outlying regional malls and navigating a cacophony of thoroughfares.
Of course, there are always outliers and American Dream could very well be one of those. But its owners and prospective tenants are making a huge bet…one counter to the prevailing trend in both retailing and consumer behavior: keep it simple.
