Can the three abandoned towers slathered with graffiti in Downtown Los Angeles avoid the wrecking ball?
That’s what prospective bidders for the 1.4 million-square-foot Oceanwide Plaza will ask this fall during a scheduled auction for the unfinished skyscrapers at 1101 South Flower Street, in South Park, the Los Angeles Times reported.
The project, developed by Beijing-based China Oceanwide, could be up for auction on Sept. 17, according to a U.S. Bankruptcy Court filing. There are several potential bidders.
Project contractors, including Australia-based Lendlease, forced the residential, hotel and retail development into bankruptcy. The project now includes three partially built towers with 40 and 49 stories, abandoned since 2019, their stacks of unfinished floors covered with graffiti.
The project, as envisioned by Oceanwide, was to contain 504 condominiums, a 184-room Park Hyatt hotel and 160,000 square feet of indoor shops and restaurants across a city block bounded by Figueroa, Flower, 11th, and 12th Streets.
The value of the as-is project stands at $434 million, according to an appraisal from Colliers filed with the bankruptcy court. A new owner would also have to spend at least $865 million to finish the job, now 60 percent complete.
China Oceanwide estimated it would need to spend $1.2 billion to finish construction, in addition to the $1 billion it has already poured into the development, according to 2022 financial filings.
While some potential buyers and construction experts say completing construction is financially unfeasible, others say it’s the only way forward.
The naysayers say tenants would be hard to find for the pricey ground-floor shops and restaurants, while it would be tough to redesign the “oversized” condominiums above.
They say the infamous towers should be torn down for something new. Industry observers have put the price of razing Oceanwide Plaza at up to $100 million.
Bill Witte, CEO of Irvine-based Related California, said it’s not worth the risk of repairs.
“Believe me, somebody would have jumped forward with a viable plan if there really was one,” Witte told the Times, adding he believes Oceanwide has “negative value because of the scale and the indeterminate amount of work that would have to be done to complete it.”
Yet the project, in a prime spot across the street from L.A. Live and the Crypto.com Arena, remains a lure to real estate investors with deep pockets.
Broker Mark Tarczynski of Colliers, who is overseeing the efforts to sell Oceanwide, rejects the notion that demolition is the only option. He predicted last month that whoever buys Oceanwide Plaza will finish it.
“It’s about two-thirds of the way done, with about $1.2 billion already invested in it,” he said, and is structurally sound, according to an engineer. “Why would you tear down a perfectly good project? It’s unimaginable.”
A major challenge for any buyer of Oceanwide Plaza would be redesigning its large condominiums, once targeted to attract Chinese investors from overseas before China tightened the flow of money out of the country.
Large condos have proved a tough sell in Los Angeles, where wealthy buyers tend to prefer standalone homes, according to the Times.
Converting the big units to smaller, more affordable ones would be extremely difficult because of the way the floors are built, architect Scott Johnson, who specializes in designing highrise buildings, told the newspaper. Denser towers would require more elevators and parking.
“We can’t take a floor that maybe has six huge units and then get 12 small units because every new toilet, every sink, every drain line, every vent would have to be cut into the slab, which has all these steel cables in it supporting it,” Johnson said. “The multiplication of units can’t happen here.”
— Dana Bartholomew
Read more
- Bankrupt Oceanwide Plaza slated for auction block in September
- Oceanwide puts graffiti-covered towers up for sale in DTLA
- BH Properties offers $10M to bankrupt Oceanwide Plaza to keep lights on
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