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The sale of the $1.2B Oceanwide Plaza may finally be able to proceed after a bankruptcy judge told attorneys she intended to approve the plan to sell it off.
In a critical turn, attorneys for the city of Los Angeles on Monday withdrew their objections to developer Oceanwide Plaza LLC's plans to liquidate the asset after the inclusion of provisions in the plan to speed up graffiti removal, mitigate blight at the property and quickly close a sale.
The changes have made it more likely that the incomplete project, which has sat in limbo in a prominent Downtown location for more than six years, will see "substantial completion," according to a Monday filing.
"While the City continues to have concerns with respect to certain aspects of the current proposed Plan, it recognizes that in response to the Objection, meaningful improvements that serve the interest of the downtown Los Angeles community and its residents and stakeholders have been made," attorneys for the city wrote in the filing.
The new requirements call for the proposed buyer, KPC Square LLC, to "immediately initiate comprehensive graffiti removal and blight abatement efforts" at the property, giving it 90 days after the judge's confirmation of the new plan to complete the work.
It also sets a six-month time frame for KPC to close the sale and paves the way for Oceanwide Plaza to select a backup buyer if KPC falls through. That time frame can be extended, but only if the court, KPC and Oceanwide unanimously agree, according to filings from the city.
Last-minute changes to provisions of the plan made during a midhearing break led other objectors, including a mechanic's-lien holder, to conditionally withdraw their objections, too, pending the review of the final document. The final version is set to be submitted to all parties and the court by Tuesday morning.
"I am delighted to make the finding that this is a plan that meets all the requirements of Section 1129 [of the U.S. Bankruptcy Code], and I will be delighted to enter an order confirming the plan," Deborah Saltzman, the bankruptcy judge overseeing the case, said at Monday's hearing.
Objections from the city and other parties had thrown a wrench in progress on approving the plan of liquidation, which allows the property to be sold.
Earlier this year, the city called into question KPC Square's ability to complete the $1.2B project, which has become a magnet for urban exploring and graffiti enthusiasts.
KPC Square, a partnership of Kali P. Chaudhuri, a Riverside-based developer and head of KPC Development Co., and Lendlease, the former general contractor on Oceanwide Plaza, had submitted a $470M bid for the incomplete project.
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