City Moves To Crack Down On Oceanwide Plaza Graffiti, Force Developer To Clean It Up
The Oceanwide Plaza project in Downtown Los Angeles, unattended by security, incomplete and seemingly abandoned by its developer, has become a magnet for taggers in the last few months, collecting graffiti up and down its towers. Now, the city has moved to force the developer's hand to secure the site and clean up the paint.
The city council voted 14-0, approving a motion introduced by Council Member Kevin de León that would give the city the green light to do the clean-up work if the developer doesn't do it first. CoStar first reported on the motion.
The developer was issued a notice from the city's Department of Building and Safety on Jan. 31 directing it to clean up the graffiti and secure the site so taggers could not continue entering. If no progress is made by Feb. 17, the motion would allow the city to step in.
"It will send a very clear message to Oceanwide Development, you have two weeks, two weeks to clean up all the graffiti on every single floor," de León, whose district includes Oceanwide Plaza, told ABC 7. "If they don't, then we the city will intervene and will act for them, but we'll also give them a bill."
Nearly every floor of the dormant Oceanwide Plaza luxury development in Downtown LA was tagged this week. I counted 27 floors of graffiti. The $1 billion project was stalled 5 years ago and sits just across from LA Live and the red carpet for Sunday's Grammys. @kcalnews #DTLA pic.twitter.com/FAGbOecSHw
— John Schreiber (@johnschreiber) January 31, 2024
Whether the developer, an entity controlled by Hong Kong-based China Oceanwide Holdings Ltd., will comply or pay the bill is unknown. The trio of towers that make up Oceanwide Plaza have been sitting unfinished across from what is now the Crypto.com Arena since before the pandemic.
The developer has tried repeatedly to secure a buyer, a partner or financing to complete the project — work which is expected to cost about $1B. Oceanwide has put about that much into the project to date.
If the city has to do the work and doesn't receive payment, it can put a lien on the property and take the developer to court to get repaid. But if that scenario plays out, it won't be the only one with a lien on Oceanwide Plaza.
Oceanwide has also faced multiple lawsuits from more than 30 contractors on the project who say they were not paid for millions of dollars of work. Those contractors have placed mechanics liens on the property. In 2021, Oceanwide anticipated the cost of resolving the lawsuits and legal issues relating to the development, not including legal fees, to be a little over $220.4M.
The developer is facing an additional lawsuit from EB-5 investors in the project who say they are owed $157M. They are attempting to force a foreclosure sale in court to be repaid and are also in a legal battle with Oceanwide's contractors over whose liens have priority, or who will get paid first in the event of a foreclosure sale.
China Oceanwide Holdings, the parent company of the graffitied project's developer, has also been ordered to liquidate in courts in Hong Kong and Bermuda after creditors filed petitions concerning unpaid debts.
In Friday's council meeting, de León alluded to the existing liens and debts on the property in response to calls from stakeholders during public comment to take the building via eminent domain.
"Easier said than done," de León said, noting that estimates to finish the project of around $1B plus the fair market value of $500M and the amount of the existing unpaid debts make it financially impossible and unwise for the city to purchase.
The completed building will contain 504 units. Buying it and finishing it alone would put the cost for that housing at a staggering $3M per unit, he estimated.
"You do all the math and you know it is not possible," de León said. "We do need someone to step up who has the financial wherewithal, deep pockets to actually make that investment. I can only imagine right across the new Crypto.com arena, this will be a property that'll be worth a lot of money five to 10 years from now. But obviously we need someone to step up and do what's right."
