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The future of the American mall

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The mall industry is bleeding stores by the thousands, and one developer is betting $5 billion that rollercoasters can save it.

Nikki Battiste’s report for CBS Mornings lands at a brutal moment for American retail. Nearly 1,700 mall-based stores closed in 2018, and more than 4,000 have shut their doors so far in 2019, according to Bank of America data. Against that backdrop, the Triple Five Group has opened the first phase of American Dream, a 3-million-square-foot megamall in East Rutherford, New Jersey, that bets its survival on rides and ice rinks rather than department stores.

• American Dream cost roughly $5 billion to build and sits on a Meadowlands site that spent about 16 years in limbo under its former name, Xanadu, through multiple bankruptcies before Triple Five took control in 2011.
• The complex flips the traditional mall model: 55 percent of the space is devoted to entertainment and dining, with only 45 percent left for conventional retail.
• “Chapter 1” opened October 25, 2019, with the Nickelodeon Universe theme park and an NHL-regulation ice rink, and later phases through March 2020 will add Big SNOW, North America’s first indoor ski resort, a DreamWorks water park, and roughly 450 stores and restaurants.

A Long, Troubled Road to Opening Day

The site’s history explains why American Dream’s launch drew so much attention. The property sat half-built for years as Xanadu, cycling through developers and creditors before Triple Five — the Ghermezian family operation already known for the Mall of America in Minnesota and West Edmonton Mall in Canada — took over in 2011. That’s roughly 16 years of stalled construction before a shovel of dirt turned into an actual opening date.

Getting there wasn’t quick even after Triple Five stepped in. The project moved forward in a four-stage rollout rather than a single grand opening, a sign of how much capital and construction were still required to fill out the full 3-million-square-foot footprint.

Betting Against E-Commerce With Entertainment

CEO Don Ghermezian built the pitch around a simple idea: online retailers can undercut prices, but they can’t replicate a physical thrill. Dedicating 55 percent of American Dream to entertainment and dining, rather than the anchor-store model that built malls like it decades ago, is a direct answer to Amazon and its imitators.

You can’t ride a rollercoaster on your iPad.

That line, from Ghermezian, sums up the entire strategy. Nickelodeon Universe and the NHL-regulation ice rink that opened with “Chapter 1” on October 25, 2019, aren’t sideshows to the shopping — they’re the draw meant to pull people through the doors in the first place, the same logic Disney has leaned on as it fights to keep families choosing physical destinations over screens, as seen in the struggles around Disneyland’s reopening timeline.

Retail as the Second Act, Not the Headline

Creative director Ken Downing framed the shift bluntly: the traditional mall concept, he said, belongs to another era. Under the American Dream model, the roughly 450 shops, restaurants, and attractions planned for the finished complex exist to capture the foot traffic that the entertainment side generates, rather than the other way around. It’s a reversal of the anchor-department-store playbook that built regional malls for the last half-century, and one that Triple Five is staking $5 billion on to prove out.

Remaining Venues Awaiting Official Opening

Chapter 1 covered Nickelodeon Universe and the ice rink. The remaining phases, scheduled through March 2020, bring the parts of American Dream that no traditional mall can match: Big SNOW, an indoor ski slope that would be the first of its kind in North America, and a DreamWorks-branded water park, alongside the bulk of the retail and dining lineup.

Whether those attractions actually translate into sustained retail sales — rather than a one-time novelty crowd for the rollercoasters and ski hill — is the question Triple Five will spend 2020 answering, phase by phase, as the rest of American Dream’s 3 million square feet comes online.