Downtown Los Angeles' high-profile, incomplete Oceanwide Plaza high-rise project has finally reached an agreement with its creditors that will allow it to exit bankruptcy and clears the way for the property to sell, Bloomberg reported, citing anonymous sources.
Bloomberg identified the prospective buyer only as a "potential investor."
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Under the agreement, developer Oceanwide Plaza LLC will owe its lender, LA Development Investment LP, $230M, while a group called U.S. Construction and DTLA Funding would be entitled to roughly $169M for mechanic's liens on the project, according to court filings.
The agreement "resolves a host of complex, multi-party disputes that have dominated this chapter 11 case and a related state court action, threatening to exhaust the estate's resources with no clear end in sight, except through this Settlement Agreement," attorneys for Oceanwide Plaza wrote in a Jan. 28 court filing.
Bidders for the property have been circling, but the sheer amount of money it will take to complete the project — an estimated $1B — along with the cost to purchase the project has presented challenges for financing, Colliers Executive Vice President Mark Tarczynski, part of the team facilitating the sale, told Bisnow in April.
The most recent appraisal for the property placed its value at $433.9M, according to a court document dated Jan. 22, but the value of the incomplete project has been hotly debated by its creditors.
The trio of towers, which sit in Downtown across from L.A. Live and the Crypto.com Arena, are in a prominent location that will be especially visible in the upcoming Olympic and Paralympic Games.
In a Jan. 28 declaration to the court, the chief restructuring officer for Oceanwide Plaza, Bradley Sharp, said the settlement agreement "serves a significant public interest" because of the blight and public safety concerns the project poses as it currently stands.
"A prompt sale and eventual completion of the Project is a major priority for the City and the public at large," Sharp wrote.
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