The City of Los Angeles has pumped the brakes on the sale of Downtown’s graffiti-covered Oceanwide Plaza towers as the blighted property’s fate hangs in bankruptcy court.
A court decision in the case was delayed until July 20 as the proposed buyer, a creditor coalition led by developer Kali Chaudhuri, struggles to get city officials to sign off on its $470-million purchase of the unfinished mixed-use development.
The site, abandoned in 2019 when Beijing-based developer Oceanwide Holdings ran out of funds, sits across from Crypto.com Arena and L.A. Live. It includes three high-rise towers – slated for condominiums and a Park Hyatt hotel – that need substantial interior work and a clean-up of the roughly 27 floors graffiti artists started tagging in 2024.
Seeking a ‘successful’ sale
The Chaudhuri-led Corona-based KPC Square’s bid to buy Oceanwide Plaza and complete construction in February was welcome news to those who’d hoped for the site’s rehab by the 2028 Olympic and Paralympic Games. Road bumps are pushing that dream further out.
In a May 5 filing, the city argued the buyer’s development plan failed to present a concrete and probable path to closing and completing the project.
“The city does not seek to prevent a viable sale; it seeks one that can be successful,” according to the filing. “As verbally presented, the development plan is limited to concrete information on certain discrete improvements … and does not include a broader, integrated development program for the rest of the Project supported by a detailed phasing plan, a construction schedule, or other supporting materials.”
On the day of the filing, KPC Square provided updated financing information and a proposed construction and development plan for the project’s first phase. The city, which said it had met with the proposed buyer on its initial development proposal six times, said it couldn’t determine whether the new materials demonstrated “a credible path to satisfy the (plan support agreement) closing conditions to move the Project forward on a reliable timeline.”
“The city does not seek to prevent a viable sale; it seeks one that can be successful,” officials said in its filing.
The towering saga
Construction began on the $1.2-billion, 1.5 million-square-feet complex in 2015. Developers had dreamed up a site that would serve as a focal point to a Downtown hub reminiscent of New York City’s Time Square. The towers – one of which would be L.A.’s tallest residential building at 52 stories – would rise from a six-story podium wrapped in an LED screen.
Since pulling out and leaving the project 60% done, Oceanwide Holdings has been mired in Chapter 11 proceedings. Years of heavy litigation gave way to a pivotal bankruptcy exit agreement approved in late January.
“This settlement agreement puts an immediate stop to this value-destructive litigation,” attorneys for Oceanwide said in a Jan. 28 court filing.
The settlement opened the door for a purchase offer from KPC Square, a joint venture formed by affiliates of Oceanwide senior creditors Lendlease and Chaudhuri’s The KPC Group. The latter owns and builds commercial properties in California and India and is the developer behind a $300-million hotel in Inglewood’s Hollywood Park slated for completion this December.
In a February release, Oceanwide’s chief restructuring officer Bradley Sharp said KPC Square’s purchase proposal was the “shortest path to completion.”
“We are pleased to see this transaction move forward, which we believe is the best possible outcome given the challenging circumstances around this property,” Sharp said at the time.
