The cleanup of one of the most notorious collections of graffiti in the country has been postponed again as the proposed buyer of the stalled Oceanwide Plaza development in downtown Los Angeles struggles to reach terms with city officials who must sign off on the $470-million sale.
Wiping clean the empty high-rise towers besmirching the city skyline with florid graffiti art is a stated priority for buyers and the city, but a federal bankruptcy court has yet to approve the sale. A court decision was delayed for a second time this month until July 20 as both the city and the designated buyer seek concessions from each other.
The proposed buyer of the residential, hotel and retail project in bankruptcy proceedings is a partnership led by Kali P. Chaudhuri, whose KPC Development Co. owns and builds commercial properties in California and India.
KPC and partner Lendlease, the original contractor for the project, filed an initial purchase agreement with the court in February after a lengthy auction process.
In a recent filing, the city expressed doubt about KPC’s ability to complete the massive project, which is intended to include housing, a hotel, stores and restaurants.
The original developer, Beijing-based Oceanwide Holdings, spent about $1.2 billion on the project before running out of money in 2019 and halting construction at about 60% completion. Industry experts have estimated it may take another $1 billion to finish it.
Early in 2024, taggers began turning its skyscrapers into canvases for graffiti. Base jumpers parachuted from its heights, and a performance artist recorded himself teetering along a 1-inch-wide slackline strung between two of the properties’ 40-story towers.
The complex gained fame as an arresting sight on the L.A. skyline, a graffiti-covered oddity on Figueroa Street — the wide thoroughfare that connects downtown’s financial district with L.A. Live, Crypto.com Arena and the Los Angeles Convention Center. It fills a large city block across the street from the arena, an A-plus location in real estate terms for being in the midst of year-round activity.
Removing the graffiti would be the “first priority,” Chaudhuri said when the planned sale was announced.
The first phase of construction would include installing the massive LED screen planned to wrap around the base of the complex at 11th, Figueroa and 12th streets.
The leverage the city has on the pending sale includes its status as a creditor seeking to recoup public funds spent to protect the complex with fencing and deploy police security to prevent vandalism. KPC needs the city’s approval of its plan to secure financing to proceed with construction.
After examining KPC’s development plan and touring the property, the city has decided not to approve the plan as currently proposed, according to a recently filed document. The city wants KPC to more clearly show that it has a credible plan to get construction permits, fix blight in the near term and demonstrate that it can fund the purchase and renovation.
“The proposed purchaser has not provided materials sufficient to close the gap between the city’s stated requirements and the proposed purchaser’s current development plan,” lawyers for the city wrote.
KPC and Lendlease said they are negotiating to close the deal.
“Over several years, we have developed a comprehensive plan to enable immediate graffiti abatement, restart construction, and deliver both an Olympic-ready site and a long-term asset for Downtown Los Angeles,” buyers’ representative Melanie Mendoza said. “We continue to meet with the city, respond to questions in good faith, and address outstanding issues through continued engagement and collaboration.”
