New Jersey mega-mall bond deal faces renewed court challenge
NEW YORK, Sept 21 (Reuters) - American Dream, New Jersey's long-stalled mega-mall and entertainment complex, faces a renewed legal challenge from a nonprofit group seeking to block $1.15 billion in tax-exempt financing that developers say they need to finish the project.
The New Jersey Alliance for Fiscal Integrity on Wednesday revised an appeal it now has before state Superior Court. The group says the New Jersey Sports and Exposition Authority (NJSEA) approved the bonds without proper public notice and lacks the authority to issue such debt.
At its board meeting last week, the NJSEA said that public financing was crucial for the $2.7 billion project and needed to be finalized soon. The meeting was supposed to help clear up some of the alliance's concerns about the deal.
But the NJSEA's efforts to "remedy the litany of procedural and substantive defects" in its bond resolutions fell short, the alliance's lawyer Thomas Calcagni said in a letter to the NJSEA on Tuesday.
The mall is located nearby the New Jersey Meadowlands Sports Complex in East Rutherford, home to the New York Giants and Jets National Football League teams. It has been under construction for 12 years and multiple developers have poured money into the still unused project.
Planned for the site are a water park, indoor ski slope, mini golf course, ice rink, performing arts center, aquarium, shops and restaurants and an 8.5-acre Nickelodeon indoor theme park.
A spokesman for the NJSEA had no comment. A spokesman for developer Triple Five Group of Companies did not immediately reply to a request for comment on Wednesday.
The unrated bonds are expected to carry a top interest rate of 7 percent and be sold to the market by the Wisconsin Public Finance Authority through Goldman Sachs.
The alliance took issue with the complicated scheme involving an out-of-state entity and said it was improper to pledge revenues - in this case payments made in lieu of taxes by the developer - for bonds in another state.
Neither the state of New Jersey nor the NJSEA are expected to have any obligation to repay bondholders if the developer fails to do so. (Reporting by Hilary Russ; Editing by Daniel Bases)
© Copyright Reuters Ltd. All rights reserved. The information contained in this news report may not be published, broadcast or otherwise distributed without the prior written authority of Reuters Ltd.
