Oceanwide Plaza Creditors File To Force Sale Of Abandoned Downtown LA Project Site

The saga of Oceanwide Plaza, the graffiti-emblazoned stalled luxury condo, retail and hotel project in Downtown Los Angeles, continued this week as creditors took action in court that could finally force a sale of the site. 

On Tuesday, Lendlease and four other contractors on the project who claim they haven't been paid filed a petition against Oceanwide Plaza LLC, the developer of the property, in the U.S. Bankruptcy Court for the Central District of California. Lendlease sees the move as the only way it will be compensated for its services rendered, the company said in a statement. 

“We sought to avoid this outcome,” Lendlease said. “But Oceanwide Holdings admitted to running out of money for the Oceanwide Plaza project more than four years ago.” 

Lendlease’s goal with the petition is to have the court appoint a trustee to oversee a sale of the property, ending the “years-long deadlock” at the site. 

“Only then can this unfinished project move forward for the good of the local community,” Lendlease said.  

Oceanwide Plaza LLC owes Lendlease and its fellow petitioners a total of $4.3M, according to the petition.

The case is set for a hearing on March 28, according to court filings. In relation to that hearing, all the petitioning creditors have until March 14 to explain why the case shouldn't be dismissed.

The creditors are expected to argue at the hearing that they have exhausted other methods and avenues for compensation. If they go forward, the proceedings will require Oceanwide to disclose information about assets and liabilities in the pursuit of an accurate accounting of what the company actually has and why those assets haven't been used to pay debts. 

Trouble for the Oceanwide Plaza developer extends beyond the court system. The Los Angeles City Council voted Friday to approve $1.1M of city funds to secure the ground level and put up fencing at the site, which has attracted trespassers who have tagged several floors of the trio of towers that top out at 53 stories tall. The city is paying upfront to secure the site and keep new taggers and trespassers out of the towers.

The developer was given a Saturday deadline to do the work itself, but it appears it hasn't given city leaders assurances that it will do so. 

Getting paid has proven difficult for many involved in building the Oceanwide Plaza. The development is at the center of a web of litigation that has dragged on for years and spanned several cases involving unpaid contractors and unpaid EB-5 investors. The parent company of Oceanwide Plaza LLC, China Oceanwide Holdings, is facing liquidation on international fronts.