EAST RUTHERFORD, N.J. — American Dream got taken to court by the little town next door. Now it’s paying up.
East Rutherford sued the Meadowlands mega-mall over millions of dollars in unpaid fees. Three years later, the borough has landed a $7 million settlement, according to a Thursday report by NJ.com.
American Dream must pay East Rutherford $5 million within 10 days of the Oct. 1 court-approved settlement, followed by another $2 million on the one-year anniversary.
And the bill doesn’t end there.
The mall must also pay $62,500 every year for each undeveloped parcel set aside for potential hotels, a convention center and other projects.
If those parcels are eventually developed, American Dream would owe East Rutherford another $2.5 million per parcel.
The fight dates back to March 2023, when East Rutherford sued American Dream and the New Jersey Sports and Exposition Authority in Bergen County Superior Court.
The borough claimed American Dream owed $7.5 million in unpaid payments in lieu of taxes, known as PILOTs.
The mall argued it did not have to make the payments until its massive 3.3 million-square-foot complex reached full occupancy.
East Rutherford disagreed.
At the heart of the fight was the language in the PILOT agreement requiring payments once the retail and entertainment portion of American Dream “opened for business to the general public.”
American Dream opened its doors in October 2019.
The borough also sued over roughly $400,000 in unpaid sewer and fixture fees. American Dream had paid some of those fees in 2021 and 2022 but had not paid amounts from 2019 and 2020, according to the lawsuit.
The NJ Sports and Exposition Authority had separately guaranteed the development entities’ PILOT payments under a 2017 agreement. East Rutherford claimed the authority failed to honor that guarantee after receiving notices of default.
The settlement was approved by the NJ Sports and Exposition Authority on Sept. 24 and by a court on Oct. 1.
American Dream declined to comment to NJ.com. An attorney for East Rutherford also declined to comment.
The full settlement agreement remains under wraps because it contains a confidentiality provision.
But the bottom line is public: East Rutherford took on American Dream over millions in unpaid payments and walked away with $7 million up front, more money potentially coming and a three-year legal battle finally over.
