It takes about 90 seconds for a construction hoist to climb to the penthouse on the 51st floor of downtown’s Oceanwide Plaza, where workers tied the rigging for a window washing platform last month.
Dozens of floors below, a graffiti removal operation was in full swing Oct. 28. Two men in harnesses and hard hats leaned out from a swing stage to brush chemical stripper onto windows that taggers previously reached by climbing over safety cables onto a ledge “a little more than a foot wide,” said John Petty, head of real estate development at KPC Group, which is overseeing the graffiti abatement as part of a bid to buy the towers in the coming months.
“It’s honestly amazing that no one died,” Petty said. “I say that all the time.”
After more than two and a half years as downtown’s most photographed eyesore, the unfinished megaproject Angelenos call Graffiti Towers are nearly scrubbed clean.
KPC announced Oct. 20 that crews had finished removing exterior graffiti from 250 balconies at 1101 S. Flower St. and are now completing the remaining windows. It’s the first promise the Corona-based developer has delivered since a federal bankruptcy judge confirmed its $470 million mostly credit-bid for the project in July.
And removing the graffiti has been a priority for Mayor Karen Bass. “Completing this project is about far more than finishing a building – it’s about restoring confidence, reconnecting a vital commercial corridor, and unlocking the economic potential of one of the city’s most strategic destinations,” she said in a statement in July. But the cleanup was the easy part. KPC and its partner, Sydney, Australia-based Lendlease, must close the purchase of the bankrupt towers by Jan. 22, according to the court’s confirmation order. Before then, KPC needs a construction loan, a construction contract and a set of approved permits to finish a project described in court filings as about 60% complete. If KPC decides the development “is not economically viable as entitled,” the order lets it walk away.
The man betting on the towers, KPC founder Kali Chaudhuri, has been through bankruptcy court before. In 1999, KPC bought 81 California clinics serving some 511,000 patients from the collapsed MedPartners for $24 million. KPC Medical Management closed its last 38 clinics and filed for Chapter 11 the following year.
Chaudhuri previously told the Business Journal he lost everything and rebuilt.
“I’m not all good. I’m good and bad,” Chaudhuri said. “But I’m determined to do what I think I feel that I can do.”
His first major U.S. real estate project is the 300-room Kali Hotel at Hollywood Park in Inglewood, financed with a $195 million Bank of America construction loan. KPC paid for roughly the first half of construction in cash before receiving the loan, according to the company.
Oceanwide is a bigger bet. Chaudhuri has “always wanted to do a super tall building somewhere in the United States,” Petty said.
From canvas to clean glass
Beijing-based Oceanwide Holdings paid $174 million for the 4.6-acre site across from Crypto.com Arena, according to bankruptcy filings, and hired Lendlease as general contractor in 2016. The towers, two of them 42 stories and one 55 stories with an 11-story hotel, topped out in March 2018.
Then the money from China stopped. Lendlease demobilized most of its subcontractors by January 2019, and Oceanwide spent the next five years failing to find financing or a buyer, according to its filings. By then it had sunk roughly $1.2 billion into the project.
In early 2024, taggers and base jumpers broke into the empty towers and turned them into a vertical canvas visible from the freeway. The Los Angeles City Council called the project “a blight” in a 2024, resolution and voted to spend nearly $4 million to remove graffiti and secure the site. Four days later, unpaid subcontractors forced Oceanwide Plaza into Chapter 11.
KPC entered the case by buying the property’s $230 million senior loan held by L.A. Downtown Investment, the fund that raised money for the project through the federal EB-5 immigrant investor program. Now, a joint venture between KPC and Lendlease are credit bidding about $400 million of debt and adding up to $70 million in cash.
The city opposed the deal until the morning of its July 20 confirmation hearing. Graffiti removal was one of its conditions for dropping that opposition.
Removing graffiti from 250 balconies
In a July 20 court filing, the city said KPC Square, the KPC-Lendlease joint venture buying the project, had agreed to begin removal immediately after confirmation and finish within 90 days.
Petty said crews met that deadline for the towers’ 250 balconies.
“We finished the 250th one at 4 o’clock on October 20, exactly 90 days,” he said. “We had to work overtime to get there.”
The windows between balconies took longer. Crews could reach them only by swing stages lowered from the roof, and they were still working away on Tower One during the Business Journal’s Oct. 28 visit.
Some balconies took an hour. Others took four or five because taggers had layered tags on tags, sprayed primer first or sealed their work with a clear coat, Petty said.
Crews rinsed the stripper off with a scalding hot chemical power wash. KPC tested several products before settling on East Los Angeles-based World’s Greatest Graffiti Removal Products, whose owner “has come out here and basically played master chemist,” Petty said, mixing “a little bit of this and a little bit of that” for stubborn tags.
And the taggers left souvenirs, including at least one gun found under debris on the property’s amenity deck, according to the lift operator who found it. In the parking garage beneath Tower Two, Petty held up an empty spray can, one of hundreds he said were left behind. On the wall behind him, a sprawling teal-and-red piece credited to “Mobbers Crew” was signed “Oceanwide Plaza 2024.”
That piece, like many others on interior walls, will stay a while. Tags still cover sheetrock and concrete walls on upper floors and in the garage. Petty said interior graffiti is “not a high priority” and that most of it will disappear under a skim coat of drywall mud once construction resumes.
“You really don’t notice it that much from the outside,” he said.
Who’s paying
The Chapter 11 plan for Oceanwide provides a budget for the cleanup through the bankruptcy estate, but KPC has spent its own money on top of that, according to the company.
The July confirmation order puts KPC in charge of selecting contractors for the job using funds from the property’s debtor-in-possession loan from DTLA Lending, an affiliate of Lendlease, according to Greenberg Traurig’s Howard Steinberg, the attorney representing KPC in the proceedings.
An updated budget filed Nov. 2 sets aside $750,000 for graffiti abatement out of $27 million in projected spending through late January.
But the actual cost is likely much higher.
Steinberg put the cleanup at about $3 million in August. Petty said in an Oct. 7 interview that he didn’t know the final cost because chemical costs had doubled.
“I haven’t been keeping track,” he said, but added KPC has spent “a considerable amount of money” to meet the city’s timeline. Crews worked six days a week, he said, and used “many more gallons of expensive removal chemicals” than estimated because of the coats layered on many windows.
The hard part
KPC’s purchase agreement spells out three things that need to happen for the deal to close by a deadline of Jan. 22, which can be extended if the joint venture partners and city agree to it.
City entitlements must be “procured to the satisfaction of Buyer, in its sole and absolute discretion.” A construction contract must be signed. And a construction loan must close “on terms acceptable to Buyer in its sole and absolute discretion.”
With 80 days to go before that deadline, KPC hasn’t picked a builder or provided a total cost estimate yet. “We are still working through the general contractor selection process, as well as a cost estimate for construction phases one and two,” Petty said in an email. He declined to say whether financing is committed but said “several lenders” have provided term sheets.
And he added the city’s buildings department is preparing a list of expired permits to reinstate, probably “in the next few weeks.”
An extension may be coming. At an Oct. 29 status conference, Steinberg told U.S. Bankruptcy Judge Deborah Saltzman that “a very short extension of the closing date may be needed,” according to a summary of the hearing prepared by KPC’s attorneys.
The parties are “targeting a January 2027 closing,” Petty told the Business Journal. “There might be a need for a short extension. We are currently evaluating. Any extension would most likely be lender driven,” he added.
Chaudhuri, the orthopedic surgeon who founded KPC, said in August that news coverage of the city’s hesitation had given some lenders pause. But “many lenders have come forward,” he said. “We have more than we need.”
“It is not if but when,” he said.
The city has been the tougher audience. In a May 5 objection, city attorneys told the court KPC’s development plan “cannot be approved as currently proposed.” KPC had supplied “limited financing information” and a construction schedule covering only Phase 1, they said. The city called KPC’s list of required approvals, filed under seal as Exhibit E, “overly broad, open-ended.”
The city dropped that objection July 20 after KPC agreed to the graffiti cleanup, a fixed six-month closing window and a backup buyer if KPC falls through. It said Exhibit E was being revised “to eliminate new entitlement request, and other discretionary approvals.”
The revised list remains sealed, but Petty described it as “essentially a list of contingency items” and said the city “has been working with us to fulfill those contingencies.”
And both parties have warmed their tone in recent court hearings. At an Oct. 29 hearing, the city’s attorneys said KPC, Lendlease and Oceanwide had worked in “extremely good faith.” They put graffiti removal at about 98% and noted “a lot of approvals still to come.”
Waiting in boxes
In the meantime, Petty has spent hours walking every floor of the three unfinished towers and taking stock of what’s inside.
Much of what contractors will need to complete the project is already on site, crated where Oceanwide left it nearly a decade ago.
In the podium’s unfinished retail space, Petty walked past crated kitchen cabinets labeled by floor and unit, some stamped with a date of March 2019. Nearby sat water heaters, a Mitsubishi escalator and 10 high-speed elevators waiting to be unboxed and assembled. Petty valued the elevators and escalators alone at about $25 million.
But not everything aged well. Racks of LED panels meant for the Figueroa Street podium’s planned video screens use 10-millimeter pixel spacing – now obsolete, Petty said. And their diodes have degraded after years in storage. KPC is trying to sell them.
One piece of good news came when the Los Angeles Department of Water and Power found a pair of transformers it had saved for Oceanwide in a yard, sparing KPC a year-long wait for new ones. Because of work at the expanding L.A. Convention Center, Petty said, the site’s permanent power connection can now come from nearby Pico Boulevard and Figueroa Street. For now, the towers run on temporary power.
He also pushed back on a past rumor that all the copper was stolen out of Oceanwide Plaza when the site went unguarded for about three weeks in 2024. That’s “absolutely not true,” Petty said.
He acknowledged “some copper vandalism” in part of the basement, but the amount of theft falls far short of the City Council’s 2024 description of trucks driving into the building to facilitate copper wire theft.
The pro forma hasn’t changed much on paper: 2.7 million square feet, a 2-acre amenity and pool deck, 1,450 parking spaces and a hotel with 184 rooms and 164 branded residences, according to Petty. Oceanwide had planned to ink a deal with Park Hyatt to run the hotel, but Petty said KPC will “probably not” use that brand and is likely to pick Marriott.
If KPC walks, the plan lets Oceanwide sell to a backup buyer. That buyer would have to pay off the secured claims in cash, including the note KPC now holds.
For now, the most visible problem is gone. Petty says he has walked “every room and every unit and every floor of all three buildings,” and he is eager to show what the graffiti hid.
“There’s actually a lot of work that has been done that people don’t realize in this project,” he said.
