It takes serious imagination to envision dropping a 16-story indoor ski slope near swampland in South Florida. That’s why the Ghermezian family, owners of the three largest shopping centers in North America, may be the only developers willing and able to pull it off.
The ski slope is among the entertainment centerpieces of the Ghermezians’ plan to transform roughly 175 acres of barren land, tucked between two major highways in Miami-Dade County, into their biggest theme park mall yet.
Triple Five, led by cousins Paul and Don Ghermezian, has long planned to develop American Dream Miami, a $4 billion, 6 million-square-foot entertainment and retail center. In addition to the ski slope, the project will feature a water park, 3-D cinema multiplex, 2,000 hotel rooms, and other theme park attractions. Bigger than the Ghermezians’ Mall of America in Bloomington, Minnesota, American Dream Miami would be the nation’s largest indoor theme park mall.
But it is going to take more imagination and a lot more risk for the Ghermezians to actually deliver on their vision, and prevent their latest entertainment-and-retail dream from evaporating.
In recent years, the family has focused on getting the American Dream theme park mall in New Jersey on stable footing.
As a result, the Miami version seems like an afterthought, where the Ghermezians are tied up in legal fights with Miami-Dade County and the Graham Companies, a Miami Lakes-based development firm that agreed to sell 64 acres to Triple Five, which it needs for the project. Triple Five owns roughly 110 acres.
Through a spokesperson, Paul and Don Ghermezian declined interview requests for this story. In an interview for The Real Deal’s March issue, Paul Ghermezian acknowledged American Dream Miami was on the backburner. The project was previously supposed to open in 2022.
“We’re very long-term players,” he said. “These are passive projects.”
The biggest hurdle for Triple Five is lifting the county’s ban on seeking subsidies to help pay for road construction for the American Dream Miami site, including a new interchange connecting to Interstate 75, one of the highways near the planned development. The county could lift the ban, come September.
“Right now, we’re just working through all the entitlement and infrastructure things that need to go in,” Paul Ghermezian said in January. “We’ve got to make sure we have the water and sewage [connections] and [expressway] interchanges.”
Road work
In 2018, Miami-Dade County commissioners approved rezoning 175 acres from industrial to commercial uses, and entered into a development agreement with Triple Five that required the developer to obtain state and federal approvals for on and exit ramps from the Florida Turnpike and Interstate 75, as well as the construction of local roads.
The developer secured $75 million in state funding for the construction of the Florida Turnpike interchange, as well as to purchase a right-of-way for the state to be able to build it, Triple Five’s spokesperson wrote in an emailed statement. The new interchange is scheduled for completion later this year.
Triple Five also turned over 24 acres to the Florida Department of Transportation for the I-75 interchange. But the $425 million road project cannot happen unless the county rescinds the ban on funding the construction of local roads serving American Dream Miami.
“In the context of a large development, the $5 million penalty may not be a huge thing.”
“There is no point in building I-75 MGD Interchanges if it would be a road to nowhere,” the Triple Five statement reads. “The County needs the I-75 interchange to be built, regardless of the American Dream Miami project, to relieve acute and worsening traffic congestion and to allow the larger area to be developed.”
When American Dream Miami was approved, Triple Five competitors Simon Property Group, Taubman Centers and General Growth Properties formed a coalition that successfully lobbied Miami-Dade County commissioners to include the road funding ban. The coalition’s strategy knee-capped Triple Five’s ambitions to quickly get started on building American Dream Miami.
Since then, the Ghermezians found an ally on the commission willing to reverse the ban. Commissioner Juan Carlos Bermudez, who was elected in 2022 to represent the district where American Dream Miami will be built, said Triple Five was dealt an unfair hand. Bermudez noted that construction of Dolphin Mall, a retail center owned by Simon Property Group in Doral, was not subjected to a similar ban when it was built in 2001. The Florida Turnpike has on and off ramps that were built to funnel traffic to Dolphin Mall.
Shortly after taking office, he met with Don Ghermezian and agreed that Triple Five’s project was singled out, Bermudez said. He is sponsoring a resolution removing the American Dream road-funding prohibition that is now scheduled to be heard in September.
“I wanted a level playing field to get roads built in my district,” Bermudez said. “I agreed with [Don Ghermezian] that it shouldn’t have happened. I told the Simon people too. It’s a competition issue between them.”
Legal fights
As Triple Five’s plans stalled due to the road construction funding debacle, the clock was running out for the company. The developer is facing deadlines to get American Dream Miami moving, including finalizing the purchase of the 64 remaining acres from the Graham Companies. In 2020, Triple Five and Graham completed a land swap for a separate 40 acres.
In July, county commissioners gave Triple Five a lifeline, agreeing to settle an April lawsuit the county filed seeking to cancel Miami-Dade’s development agreement with the Ghermezians’ firm because they had missed deadlines to submit a site plan and obtain the first round of building permits. Triple Five agreed to pay a $5 million penalty in four installments beginning next year to extend the deadlines and give the Ghermezians until 2045 to complete American Dream Miami.
Given the Ghermezians’ overall investment in the project, it’s a small price to pay to keep it on life support.
“In the context of a large development, the $5 million penalty may not be a huge thing,” said Shlomo Chopp with Case Equity Partners. “That wouldn’t be the case if [the Ghermezians] were flailing, didn’t have a plan and everything was falling around them.”
Still, a legal battle with much higher stakes also hasn’t been resolved. Last year, Triple Five sued the Graham Companies to keep alive a purchase agreement for the 64 acres. Graham claims the window to close the deal has expired, and refuses to recognize Triple Five’s contention that the agreement was extended due to a force majeure clause in the contract.
“Governmental delays have stalled the project, but clearly [Triple Five] has made substantial progress.”
Triple Five claims it was delayed as a result of the pandemic. Graham wants to jack up the purchase price, according to the complaint. Florida courts tend to narrowly construe force majeure clauses, meaning the triggering event must be specifically identified in the contract or fall under a catch-all provision and be both outside the parties’ control and unforeseeable. That means if the word “pandemic” is not in the sale and purchase agreement, Triple Five may not win that argument.
In its response to the lawsuit, Graham alleges Triple Five has only itself to blame for the delays, and is using the pandemic and the bureaucratic delays over the road construction as an excuse. Attorneys for Graham did not respond to requests for comment.
“We are hopeful that we will reach an amicable resolution with Graham,” Triple Five’s spokesperson wrote.
Nothing concrete
Triple Five has “spent years of intense effort” to just get to the point of lifting the ban on road construction funding, the company said.
“Governmental delays have stalled the project, but clearly [Triple Five] has made substantial progress,” the statement said. “[Triple Five] has prepared the full administrative site plan for American Dream Miami and discussed it with county officials.”
Yet, in his January interview with TRD, Paul Ghermezian admitted American Dream Miami is “a number of years away” and there’s “nothing really concrete today.”
The project will also likely undergo some changes.
“I think they have an aspiration to build something there,” commissioner Bermudez said. “From some discussions with [Triple Five], it will be more entertainment oriented than retail oriented just because of the market conditions. But I have not seen a plan that says X, Y and Z. We are not at that stage anyway.”
Nevertheless, the Ghermezian theme park mall model appears to be working. Mall of America in Minnesota, the Ghermezians’ largest asset that had been mired in difficulties, is “killing it,” said Chopp of Case Equity.
Yet, American Dream in New Jersey is still dealing with financial issues, such as a recent drop in value by $800 million, but has experienced success attracting patrons.
“The Ghermezians are strong guys. They know what they’re doing,” he added. “The only ones that are really interested in developing this type of concept would be them and Disney. And Disney already has Orlando.”
— Elizabeth Cryan contributed to this story.
