The city of Los Angeles is fast-tracking a process that could eventually result in a takeover of Oceanwide Plaza, a long-stalled commercial development that towers over the city’s downtown and has been widely defaced with graffiti.
City officials will decide Friday whether to give developer China Oceanwide until Feb. 17 to remove all graffiti and debris that have appeared in recent weeks and to securely fence the property, according to a pending motion filed by Councilmember Kevin de León.
The towers have been targeted by vandals breaking into the site and tagging windows on dozens of widely visible upper floors, with photos going viral online internationally of damage that symbolizes a lack of activity in some of America's large downtowns since the pandemic accelerated remote work.
"For the last few years, the unfinished Oceanwide Plaza property at 1101 South Flower Street has been a blight on Downtown Los Angeles’ South Park neighborhood," de Leon's motion reads. Representatives for de León and China Oceanwide didn't respond to requests to comment from CoStar News.
Oceanwide Plaza is a three-tower complex — with the tallest building reaching 53 stories — set in a high-profile location adjacent to Crypto.com Arena. The project was slated to include 504 condos and commercial space before construction halted in 2020 due to a lack of funding.
The development is among several projects that China Oceanwide pitched throughout the United States and was unable to complete as a result of lack of funds. Other sites include San Francisco, New York City and Hawaii.
"It is abundantly clear that Oceanwide Plaza has become a hazard to surrounding residents, businesses, passersby, and to the criminals recklessly breaking into the property and it must be dealt with immediately," according to the motion.
'Public Nuisance'
If the motion passes and China Oceanwide doesn't comply, the city would begin an abatement process that allows it to enter the property and remove debris and dangerous materials, charge the property owner costs incurred, and put a lien on against the property and foreclose if there's no payment, according to city law.
While the law says the process can result in demolition if the city wishes to fully eliminate the "public nuisance," De León told ABC 7 on Wednesday that if it passes, the city would clean the graffiti if China Oceanwide doesn't, but "we'll also give them a bill."
Graffiti was still visible on the property as of Wednesday afternoon.
Bob Weiss, a Los Angeles real estate attorney at Valensi Rose PLC, said if the city took control of the site, it's unlikely it would want to demolish the entire property given the cost. However, a city lien on the property lets it move to try to foreclose for nonpayment.
"But that's no easy piece of cake," Weiss said.
Thomas Kearns, co-chair of the real estate practice at Olshan Frome Wolosky LLP in New York City, said that liens in the abatement processes can supersede other liens.
Legal Remedy
"The municipality addresses the unsafe conditions and then records a lien with the expectation that the land will eventually be resold and the lien paid," Kearns said.
It's unclear if China Oceanwide has the cash to fund any graffiti removal. The developer has faced multiple lawsuits since 2019 from contractors alleging nonpayment of services.
In late 2023, the security company responsible for patrolling the Oceanwide Plaza premises sued the developer, alleging China Oceanwide failed to pay more than $1.3 million in security service fees. That lawsuit was pending as of Wednesday, according to court records.
In December, the two sides were working on a "creative solution" to make sure the security company got paid, according to Michael Naso, a business attorney who heads his own law firm and is representing the security company.
Meanwhile, China Oceanwide has been attempting to sell the project but hasn't found a buyer despite negotiations with several potential investors. The developer has sunk more than $1 billion into the project, which broke ground in 2015.
The mixed-use development was expected to feature condominiums, a five-star hotel, a mall and the largest LED sign on the West Coast. However, potential investors say the development needs a new vision as real estate demands have shifted since building began.