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While the Ghermezian brothers are just now getting ready to start construction to complete the American Dream Meadowlands mega mall in New Jersey, just across the river from Manhattan, they are playing close attention to their existing shopping centre properties as well.
Their closely held private company, Triple Five Worldwide, also owns and operates the 4.2 million square foot Mall of America. Located in the Bloomington, Minnesota suburb of the twin cities, Minneapolis-St. Paul, the mall opened in 1992 and in recent years regularly attracts more than 40 million visitors every year.
Mall of America expansion the hotel and office towers – rendering courtesy of Triple Five
The Ghermezians have long planned to double the size of this mall, which is located strategically across the highway from the Minneapolis-St. Paul airport, and yesterday they kicked off the first phase of this expansion.
“We continue to reinvent ourselves, ” said Paul Ghermezian, chief operating officer for mall owner Triple Five, and the son of one of the company’s original founders, Bahman Ghermezian. “I like to think of my family as dreamers, but we’re also doers.”
Since it was far too cold outside yesterday to try to put a shovel into the frozen ground, the initial US$325 million expansion was launched instead inside with a cloud of confetti falling on the assembled guests. A new Food Hall, underground valet parking adding another 600 parking spaces initially, and another 50 to 75 retailers will all be added in this phase – mostly aimed at upscale shoppers in a new 163, 000 square foot retail and dining section.
The mall will also add a second atrium – “bigger than the one we’re standing in today, ” said Kurt Hagen, senior vice president of mall owner Triple Five, at the party for the launch.
A 342 room luxury JW Marriott brand hotel, and a separate ten storey tower, mostly dedicated to 180, 000 square foot of office space, will come to the site as well. The physical bricks and mortar of the new hotel will actually be owned by the Shakopee Mdewakanton Sioux Community.
Mall of America expansion at night – rendering courtesy of Triple Five
For most of its history, Mall of America has operated without any hotels, bringing in mostly day visitors to the mall. Finally in 2013, Radisson Hotels opened its upscale Radisson Blu hotel on the southern side of the shopping centre.
“The Blu has been a fabulous addition to the mall, ” Kurt Hagen said yesterday. “We found that 95 percent of the guests at Blu shop at Mall of America … and I think 42 percent of them spend over US$500 at the mall.”
Speaking for the Ghermezian family Paul Ghermezian said “As far as what’s to come, we have big plans – we always have, ”
The first phase of this expansion should be open in 2015; however over the coming ten years the mega-mall will double in size if the Ghermezians follow through with the rest of their plans. Those later plans will include a world-class indoor waterpark, more department stores, an indoor skating rink plus another 7, 000 or so parking spaces.
Tax breaks are always important incentives for major new investments of this kind and Mall of America is no exception. The current expansion is being partly financed by a US$250 million tax break that Minnesota legislators and the Minnesota State Governor, Governor Mark Dayton, approved last year.
Mall of America already attracts some 42 million visitors a year, ranking it among the nation’s most popular attractions. Eventually, mall officials hope to bring 60 million visitors a year to the expanded mall, and reverse the current balance of customers so that tourists outnumber locals.
This current mall of America complex is home to more than 520 retail shops including department stores Bloomingdale’s, Macy’s, Nordstrom and Sears which surround the nation’s largest indoor family amusement park. The retail space is uniquely combined with a wide range of entertainment experiences for all ages just as it is at Triple Five’s other current giant mall the West Edmonton Mall in Canada as well. Triple Five will also follow the same formula at their new property the American Dream Mall as well.
Mall of America – courtesy of Triple Five
Since it opened more than half a billion people have visited Mall of America and the company claims it currently generates about US$2 billion in economic impact every year.
The weakening of traditional department store anchors and the growth of online shopping has meant almost no new enclosed shopping malls have been built in the United States in recent years. Mall of America is therefore very much bucking against industry trends.
However the mall has managed to steadily boost its traffic and sales anyway, by focusing on the overall experience and adding attractions that people can’t get online, going well beyond stores simply selling “stuff”. Mall of America Vice President Maureen Bausch said yesterday, “It’s about the experience, because our biggest competitor is this, ” she said, waving her smartphone. And she is quite right.
Mall of America expansion entrance – rendering courtesy of Triple Five
About the Ghermezians
The Ghermezians are a tightly knit Canadian family, who came originally from Iran.
Like many Iranian emigrants, the head of the family, Jacob Ghermezian, who died in the millennial year 2000 when he was 105 years old, thus spanning three centuries which itself is extraordinary, left Iran in 1959 at the time of the fall of the Shah.
He subsequently came to Canada in 1964 with his four sons, Eskandar, Nader, Raphael and Bahman who then grew what had been a family rug business into a major real estate and construction empire under their privately held corporate umbrella, Triple Five Worldwide.
The family’s existing business holdings include the 4.2 million square foot Mall of America in Bloomington, Minnesota, close to the Minneapolis-St. Paul international airport and the 5.3 million square foot West Edmonton Mall in Edmonton, Alberta Canada. Recently Triple Five also acquired a partly finished mall in New Jersey, very close to Manhattan, which they will now complete as their next mega mall, under the name American Dream Meadowlands. Other ventures include a Trust company and hotel interests.
The Ghermezians’ net worth has been variously estimated at around US$2 billion, though no one really knows for sure as the family carefully guards it own privacy including about financial matters. Accordingly, Forbes Billionaire’s list just does not mention them at all.