Dive Brief:
- PCL Construction Services has sued JPMorgan Chase in federal court for more than $30 million in alleged unpaid bills for the construction of the approximately $6 billion American Dream mall in New Jersey’s Meadowlands.
- According to a complaint, JPMorgan Chase was the agent for a construction loan to East Rutherford, New Jersey-based Ameream, the mall’s developer. Denver-based PCL claims the bank must make it whole, since Ameream is in financial distress and the project’s construction contract stipulated the bank would pay if the developer didn’t.
- The complaint, filed in the Southern District of New York, alleges that Ameream retroactively claimed PCL’s work was defective after it left 10 invoices unpaid from July of 2020 to August 2021, totalling more than $24 million. With more than $7 million in accrued interest, the contractor claims it’s now owed more than $30 million.
Dive Insight:
A representative for American Dream mall did not immediately respond to requests for comment. Both PCL and JPMorgan Chase declined to comment on the ongoing legal proceedings.
The complex, adjacent to MetLife Stadium, spans more than 3 million square feet and 18 acres of entertainment space, including an amusement and water park, indoor ski slope, stores and restaurants. The project was first envisioned in 1996 and took more than 20 years to build.
But just five months after its October 2019 opening, the onset of the global, COVID-19 pandemic in February 2020 quickly eclipsed the project’s completion. Since then, the mall has struggled due to initial lockdowns and shifts in consumers’ retail behavior.
The complaint claims that PCL notified Ameream each time that it defaulted on its payments, starting in June 2020, following a “pencil copy” review of the charges.
Ameream, the complaint says, understood its obligations to mark any discrepancies in the invoices and to pay the charges in full. Due to language in the construction contract, PCL asserts that JPMorgan Chase, as agent on the original construction loan, is now responsible for the missed payments.
The complaint alleges that JPMorgan Chase has also used Ameream’s construction defect claims as a ruse to avoid paying the contractor. The claims of defects were not specified in the complaint.
