Seventeen years after first breaking ground, the New Jersey-based shopping center now known as American Dream is set to launch the retail portion of its complex this month. It’s ill-timed, as U.S. physical retail is feeling the negative effects of coronavirus.
Coronavirus is the latest hurdle in the development’s road to launch, which has been plagued by obstacles for years.
Among issues it’s faced was the discovery of New Jersey’s blue laws for Bergen County, requiring American Dream retailers to remain dark on Sundays. In addition, a Barneys complete with a Freds restaurant was set to be among American Dream’s department stores prior to declaring bankruptcy. American Dream has not yet announced a replacement for the space. And during a hard hat tour of the project in July, Forever 21 was mentioned as an included retailer. The company has since closed a majority of its U.S. stores and has been excluded from America Dream’s communications.
American Dream’s retailers and restaurants were scheduled to open this month, according to plans shared in July by Don Ghermezian, co-CEO of American Dream and president of its developer, Triple Five Group. But now, retail will only “begin to open” on March 19, according to an American Dream press release dated February 27. A CMX Luxury Movie Theater was also expected to open March, but is no longer among the attractions American Dream lists as opening this spring. It’s worth noting that film studios have started delaying movie releases, in anticipation of falling ticket sales due to coronavirus.
American Dream declined to respond to questions regarding coronavirus’ potential impact on the business, despite widespread reports of dwindling foot traffic in U.S. stores. A press representative said that the complex is only 8% open, and at this point, there’s no way to judge its effects. He confirmed that the scheduled March 19 open date for a first batch of retailers will remain intact.
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Stores slated to open this month include Aritzia, Zara, Sephora, H&M, Uniqlo, Primark, Ulta Beauty, Old Navy and Morphe. Retail will continue to open throughout the year, with luxury stores slated for September.
Ghermezian has had high hopes for the retail portion of the project. In July, he said it would exclusively feature the biggest and best versions of every retailer featured. “We had to turn down more tenants than we accepted,” he told Glossy. And, as of January, 90% of the retail space had reportedly been leased out.
If retailers’ response to coronavirus in China is any indication, American consumers can expect to see significant disruptions in retailers’ operations. Luxury companies that temporarily closed store locations in China due to the outbreak included Burberry, Capri, Tapestry and LVMH.
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According to a survey conducted by Coresight Research in late February, the U.S. public’s newfound hesitancy to gather in crowded places is already hurting foot traffic in physical retailers, especially malls. More than a quarter of respondents said they’re at least somewhat avoiding public places, and 58% said they will do so if the outbreak gets worse. More than 30% are avoiding stores, and 40% said they’re avoiding or limiting visits to shopping malls.
Of places respondents were most likely to avoid, malls ranked third, behind public transportation and international travel. Among those who claimed they’ll change their behavior if coronavirus spreads, malls were named the top place they’ll avoid, with 75% saying they’ll limit mall visits.
“Most of retail is likely to be impacted by materially lower traffic in the immediate term, adding to the already precarious situation of some malls and their tenants,” said Steve Dennis, president and founder of SageBerry Consulting. “The breadth, depth and persistence of this is anybody’s guess at this point. But given what we are currently seeing in the market, delaying a big grand opening until the outlook is more certain makes sense.”
Representatives for the Shops at Hudson Yards, the retail portion of one-year-old Hudson Yards, which is the largest private development in the U.S., also declined to comment on recent hits on foot traffic. A spokesperson only provided the company’s newly launched health and safety protocols, which include ongoing cleaning and disinfection of high-touch areas, end-of-day deep cleaning and disinfection of all facilities, increased deployment of hand sanitizer, an increased supply of cleaning products, and reduced patron queueing and elevator densities.
Triple Five Group is also behind the Mall of America and West Edmonton Mall, the largest malls in the U.S. and North America, respectively. In 2011, it took over the New Jersey development, which had kicked off in 2003 under the name Xanadu, but was just 85% complete and at a standstill. Triple Five Group started construction in 2013, opting to strip the former project to the studs and start from scratch.
American Dream will eventually house 450 retailers and restaurants, and 15 entertainment attractions. Since October, Triple Five Group has been rolling out the major entertainment-focused features of the 3.3-million-square-foot space which, along with restaurants, will comprise 55% of the total project at completion. A Nickelodeon Universe Theme Park, a Big Snow indoor ski park and an NHL-regulation-size ice rink are now open. A Dreamworks Water Park will launch on March 19. American Dream is projecting 40 million visitors annually.
