Oceanwide Plans To Sell All Other U.S. Development Sites So It Can Finish LA Project
Beleaguered Chinese developer Oceanwide Holdings hasn’t made any forward movement on its billion-dollar Downtown LA project in nearly a year and a half, but it is still planning to complete and largely hold on to Oceanwide Plaza, it told investors in documents filed with Hong Kong regulatory authorities.
Oceanwide said in documents filed this week that it is still “continuously and currently approaching several financial institutions to provide a project financing or joint development plan” that would allow it to pay off its debts on the project and complete construction of it.
Oceanwide’s plan is to sell off its other U.S development projects to help its LA project wrap up.
“Looking forward, the Group will continue to dispose of assets which will not generate immediate revenue or are in the preliminary planning stage to reduce the Group’s overall liabilities, thereby reducing the Group’s recurring financial costs and working capital burden, maintaining existing businesses not being disposed of or under receivership and reserving resources to develop the LA project,” the company wrote in its filing.
There are some factors that are likely making it difficult to secure those funds.
Thirty-eight contractors on Oceanwide Plaza have recorded mechanic’s liens against Oceanwide, the company said. Including the lien filed by the former general contractor on the project, Lendlease, more than $350M is being held in lien against the project, by Oceanwide’s own count.
Oceanwide tried to sell a portfolio of development projects including Oceanwide Plaza in 2019. Another project in the portfolio, San Francisco’s Oceanwide Center, was stalled by the coronavirus pandemic. In October 2021, creditors took the keys to the development after Oceanwide failed to make payments of notes worth $321.5M.
Oceanwide Plaza sits across the street from the newly renamed Crypto.com Arena. Construction on the site has been indefinitely paused since October 2020. When Oceanwide began work on the project in 2018, it anticipated completion in 2021. Now, the company said, it is expected to be complete in 2025.
The Beijing-based developer estimates that the project will take two years to complete construction once work is restarted, so counting backward, it appears that Oceanwide is working to secure financing for its project in LA and restart work by next year.
Once that happens, Oceanwide said it plans to offer up an undisclosed portion of the apartments for sale, while holding onto the hotel and retail center to earn income from the rents on those assets, as well as the income from the ads on the project’s 850-foot LED screen on the exterior of the lower floors.
Oceanwide Plaza is expected to contain 504 residences, a 184-room Park Hyatt Hotel and 153K SF of retail and restaurants.