Rendering of Triple Five's American Dream retail and entertainment complex in East Rutherford, New Jersey. Image:

Triple Five, the company in a $40 million land deal with the Town of Riverhead, is at risk of default on its $800 million bond issuance for its American Dream mega mall in New Jersey, according to a public securities filing made Friday by the bond issuer’s trustee.

Triple Five missed a quarterly payment due in May, according to the trustee’s June 3 notice to bondholders. As a result, the trustee did not have sufficient funds on hand to make the semi-annual interest payment due June 1, the notice states, requiring the trustee to draw nearly $11.4 million on a debt service reserve account.

The trustee gave notice to Triple Five requiring it to make the missed payment on or before June 16, or else it will be in default, according to the filing.

The trustee’s notice follows a filing last month showing Triple Five’s American Dream mall had a $59.4 million operating loss in 2021, according to a consolidated statement of operations. In 2020, the operator reported a more than $64 million loss.

Since Triple Five Group is a privately held company, the full impact of its financial troubles with the $5.7 billion New Jersey mega mall is not clear as it relates to its land deal with Riverhead.

Triple Five owns a sprawling conglomerate of entities. Among them is Triple Five Real Estate I, which owns a controlling interest and is the managing member in Calverton Aviation & Technology, a joint venture with Luminati Aerospace.

Calverton Aviation & Technology is in contract with the Town of Riverhead to buy 1,644 acres of vacant industrial land at the Calverton Enterprise Park for $40 million.

Triple Five representatives have said repeatedly the issues with the American Dream project will not affect Triple Five’s ability to buy and develop the Calverton site as per its 2018 contract with the town and they are ready and able to close the deal immediately.

However, the town can’t yet consummate the sale.

The 1,644 acres being sold to Triple Five are part of a larger parcel comprising 2,100 acres owned by the town at the Calverton Enterprise Park. The remaining 456 acres are used for various public purposes, including parkland, the Calverton sewer district and a community center. Before the sale can take place, the town must subdivide the land. Final subdivision approval requires the State Department of Environmental Conservation’s issuance of two permits, which the town has not been able to obtain.

Earlier this year, Riverhead Town officials announced an agreement with CAT that will allow the town to get paid in full, while shifting the responsibility of subdividing the land to the purchaser.

The town and CAT agreed to make a joint application for benefits to the Riverhead Industrial Development Agency. If the Riverhead IDA, after financial vetting of CAT, approves the application, CAT will immediately pay the balance of the purchase price to the town and the town will transfer its 2,100 acres to the IDA. An agreement with the IDA will make CAT responsible for obtaining the permits from the DEC and other necessary approvals, at its own expense. After those permits are obtained and the subdivision is approved, the IDA will transfer the 1,644 acres to CAT and the remaining acreage back to the town.

The town board authorized the transfer of the 2,100 acres to the IDA and the joint application to the IDA on March 24.

Frank Isler, the town’s special counsel for the transaction, said at the time he expected the IDA’s vetting process and decision would take about six months.

The matter has not been publicly discussed by either the town board or the IDA board of directors since the town board adopted the resolution in March.

No application has as yet been filed with the Riverhead IDA, Tracy Stark, Riverhead IDA executive director said this afternoon. Supervisor Yvette Aguiar did not respond to a message this morning asking about the status of the application.

Editor’s note: This article has been updated to reflect information from the Riverhead IDA obtained after publication.

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