Related Cos., the developer of the $2.7 billion Grand Avenue project, said Monday that the financial troubles of a Dubai investor will have no impact on the long-delayed venture.
Istithmar World, a subsidiary of struggling Dubai World, invested $100 million in early 2008 in the massive, mixed-use project planned for vacant land and park space near Walt Disney Concert Hall.
Joanna Rose, a spokeswoman for the New York developer, did not comment on whether Related had received the entire investment. But she confirmed in an e-mail that at least a portion had been received and spent.
“We have been in regular contact with Istithmar and don’t expect the current situation to have any effect on their commitment to the Grand,” the e-mail stated.
The world financial markets were shook up last week when the Dubai government announced that Dubai World, a holding company operated by the emirate, would suspend some of its debt payments.
Markets recovered somewhat Monday when Dubai World detailed that it was looking to restructure only half its $59 billion in obligations. Also, Dubai World said Istithmar World and two other subsidiaries would honor all debts because the companies “are on a stable financial footing,” according to Bloomberg News.
Still, the financial troubles of Dubai World raised questions whether Istithmar World, its investment arm, would honor all of its financial commitments.
The Grand Avenue project has been stalled for several years as Related, the developer of New York’s Time Warner Center, failed to secure additional financing. The company had until February to begin construction and must pay a penalty of $250,000 to Los Angeles County for every month it is delayed.
Rose said Related has completed and funded “all of the construction drawings and pre-development work necessary to be in a position to begin construction when the capital markets return.”
The project’s $1 billion first phase will include a Mandarin Oriental Hotel, shops, apartments and condos. A new park also would be constructed, extending from the Music Center to City Hall.
