Denver-based PCL Construction Services sued JPMorgan Chase Bank in federal court earlier this month for $30 million in claimed unpaid work and interest related to construction of a $5-billion northern New Jersey mall and entertainment center that also faces other financial challenges since its COVID-19-impacted opening in 2019.
PCL was construction manager of the 3.5-million-sq-ft American Dream venue, which includes retail shops and restaurants as well as a water park, amusement park and indoor ski slope.
JPMorgan Chase is lead lender and administrative agent for the project’s $1.7-biliion construction loan, which gained a four-year extension last November. Under an agreement, PCL was entitled to demand payment for “all amounts” related to work completed under its contract with developer Ameream if that company failed to pay its obligations.
“Ameream is now in financial distress. It failed to timely pay more than $24 million due to PCL for invoices covering the period from July 2020 to August 2021,” says the firm's suit, filed June 15 in U.S. district court in New York City. The complaint claims Ameream and JPMorgan Chase have refused to pay remaining invoices and $7 million in interest.
“Indeed, rather than work toward a constructive resolution, Ameream has retroactively tried to manufacture claims of purported defective constructive work by PCL that are meritless [and] untimely,” the firm contends. It says that even if the defective work claim is true, the cost impact is “far less than the $24 million that was properly invoiced by PCL but is unpaid.”
PCL said in 2021 that it has been paid $1.9 billion in the $2 billion-plus construction contract, which included more than $474 million in change orders.
Financial Struggles
After a major renovation and expansion of a failed earlier mall structure, East Rutherford, N.J.-based American Dream partly opened in October 2019. But COVID-19 restrictions delayed retail openings for a year.
The mall is owned by Canadian developer Triple Five, which reported $60 million in 2021 losses from the pandemic and a fire at the ski slope.
The mall is 84% leased, with nearly 100 stores and $422 million in 2022 gross sales that rose 38.4% from the prior year, said Bloomberg. But Triple Five had earlier projected $2 billion in revenue in its first year of operation.
American Dream is making payments in lieu of taxes on $800 million of municipal debt but it faces other payment-related legal actions by lenders and creditors, as well as by officials of East Rutherford and nearby municipalities.
An American Dream spokesperson could not be reached and JPMorgan Chase declined comment.
