Mechanic’s Liens & New Jersey’s American Dream

Are Mechanic’s Liens New Jersey’s American Dream?

Some construction projects can take weeks, months, or years to complete, others like the American Dream in New Jersey, can take decades. American Dream is a Nickelodeon branded mega-mall and entertainment complex in New Jersey. It is reportedly 3 million square feet, with a combined 450+ restaurants and stores, and over a dozen acres of entertainment space, all on state owned land. It has been decades in the making and with millions in mechanic’s liens, it’s not done yet.

Underwhelming Crowds, Staggered Schedules, and a Good Old-Fashioned Curse

Forbes reported the pandemic isn’t the sole factor in the distress of NJ’s American Dream, citing problems with getting various retailers to commit to opening stores within the complex, lower than anticipated crowds, and an odd, staggered opening schedule.

“The amusement park opened when some of the rides still didn’t have approval to operate, and the food and beverage operations were limited to airport kiosk-style refrigerated cases. Visitors couldn’t get a cup of coffee at the complex until a food cart was set up near the entrance to the amusement park. Sections of the parking decks still were under construction and roped off on opening day.

The haste to open piecemeal could have been the result of pressure from lenders, or from retailers who wanted to see concrete signs that the project was moving forward before committing, or financing or construction problems.”

One source commented this project has been cursed from the beginning. “This place has been jinxed since day one, but then again it’s the curse of New Jersey” and “In the 22-23 years I’ve been dealing with the different machinations of this mall, every time there’s a problem we throw more public money in it and it gets bigger.”

Oh, and to circle back to the pandemic a moment. Part of the funding for this project came from a $2.8B Mall of America (in MN) mortgage. As we know, malls have virtually no traffic due to the pandemic – tenants aren’t paying their rents, rents pay the mortgage bills, mortgage bills aren’t paid… you see where I’m going here, right? It’s been reported that Triple Five (American Dream & Mall of America Owner) is now back on track with its mortgage, but who knows what will happen as the pandemic lingers and retailers continue to struggle.

The Lien Ride

Construction Dive reported there had been a revolving door of general contractors on this project. GC’s included Whiting-Turner, Skanska, and the current GC is PCL Construction. This massive project was broken out into 9 smaller projects. “It was a little like eating an elephant one bite at a time,” said PCL General Superintendent Tim Davenport. “It was nine separate $300 million projects.” Which means there were a LOT of (over 150) subcontractors and material suppliers on the project.

Earlier in this post I mentioned this project has been built on state land, begging the question: is the project private or public? The leaseholder is Ameream LLC and  New Jersey Sports and Exposition Authority is the reputed property owner. The Authority holds the land lease for the property, which means mechanic’s liens are the appropriate security, and are likely lien on leasehold.

Unlike the fun amusement rides the facility boasts, there has been no shortage of liens on this project. LienFinder™ reports 85 liens have been filed since 2019, with a dozen in the last few months, and over $5M in claims in January 2021 alone. January’s lien claimants include Dant Clayton Corporation which furnished materials & equipment for installation of glass and metal railings.

Other parties who filed liens in January: Bonland Industries, Inc. which furnished ductwork and mechanical work, Construction Resources Corp. which furnished elevator & forklift services, Meadowlands Fire Protection Corp. which furnished fire protection systems, and Johnson Controls Fire Protection LP which furnished life safety and labor.

In New Jersey, lien claimants have an opportunity to file a Notice of Unpaid Balance and Right to File Lien prior to recording the lien. If this notice is filed, the lien would have priority over conveyances subsequent to the filing of the notice. Further, (not that I want any project to go belly up but…) serving a Notice of Unpaid Balance may greatly improve the chance of successfully filing a valid lien after a project owner or other party files a petition in bankruptcy, allowing the lien to relate back to the Notice of Unpaid Balance. The mechanic’s lien should be filed within 90 days from last furnishing, and suit should be enforced within 1 year from last furnishing or within 30 days from receipt of a notice to commence suit.

Will It Be Completed, Or Is there Really a Curse?

It’s unknown when the facility will officially be completed and unknown whether it will survive the tumultuous economic times we are in, but one thing is for sure: don’t wait on payment, file your mechanic’s lien asap.

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