The Oceanwide Plaza towers, once envisioned as the largest mixed-use development in downtown Los Angeles, have become a symbol of halted dreams and financial turmoil. According to the YouTube channel Klign, the project, which began in 2015, faced numerous setbacks due to poor US-China relations and a volatile real estate market. Construction stopped multiple times due to financial issues and lawsuits. By 2023, the project faced foreclosure and was listed for sale, tarnished further by vandalism and graffiti. Despite its bleak past, there’s hope that a new buyer can revive this ambitious development to meet current real estate demands.
The Ambitious Beginnings
Oceanwide Plaza, located in the South Park neighborhood of downtown LA, was set to transform a former parking lot into a bustling retail and residential hub. The project was part of a series of developments on Figueroa Street, aiming to bring large video advertisement screens and vibrant urban life to the area. Oceanwide Holdings, a major Chinese conglomerate, spearheaded the development, marking its first major foray into the US market with plans for additional projects in New York, San Francisco, and Hawaii.
Construction Halts and Financial Troubles
Construction on the three towers began in April 2018, but by January 2019, interior work halted as Oceanwide Holdings restructured its capital. Despite promises to resume work shortly, the project faced multiple delays due to unpaid work and ongoing lawsuits. By late 2019, the Chinese government’s crackdown on capital flight amidst its own real estate crisis and an ongoing US trade war further complicated matters. Construction halted completely, leaving the project in limbo.
Foreclosure and Sale
By June 2023, Oceanwide Holdings failed to meet its debt obligations, leading to foreclosure and the listing of the project for sale. The company owed $157 million to a group of EB-5 lenders and needed the sale proceeds to repay this debt. However, no asking price was provided, and the project was removed from the sale listing after a contractor filed a court claim to prioritize payment in the foreclosure sale.
Design and Vision
Designed by Callison RTKL as part of LA’s Sports and Entertainment District Master Plan, Oceanwide Plaza was set to offer unmatched amenities and diverse uses. The development included three high-rise towers atop a spacious retail podium. Tower 1 was to feature a 184-room five-star Park Hyatt hotel with 164 serviced condo residences. Towers 2 and 3 were designed to house 504 residential condominiums. The development also included a retail mall, a two-acre private park, fitness facilities, and more.
Vandalism and Graffiti
In December 2023, Oceanwide Plaza made national headlines when three Los Angeles graffiti artists gained access to the highest of the towers and signed their names on its floor-to-ceiling windows. This vandalism continued into early 2024, covering large portions of all three buildings in graffiti. The incident sparked political urgency, leading the LAPD to allocate resources to safeguard the property and the LA City Council to initiate a cleanup campaign. Despite these efforts, the graffiti and vandalism remain a stark reminder of the project’s stalled progress.
Investors’ Changing Perspectives
Potential investors believe the design of Oceanwide Plaza needs to change due to shifting real estate demands. Initially expected to feature upscale condominiums, a five-star hotel, and a massive LED sign, the project now stands unfinished and tarnished. Investors suggest converting the condos into smaller apartments and repurposing the retail space to meet current market demands. Some even propose partial demolition, arguing it might be cheaper to rebuild parts of the project than to retrofit them.
Financial and Economic Challenges
The future of Oceanwide Plaza faces significant financial and economic challenges. With an estimated $1.2 billion needed to complete the project, any new owner would need to invest heavily. Additionally, high insurance costs, broader economic challenges, and rising vacancy rates in downtown LA’s apartment market add to the project’s complexities. The introduction of a 5.5% mansion tax on properties sold or transferred for over $10 million further complicates the financial landscape.
Potential Future Developments
Despite the challenges, there is hope for Oceanwide Plaza’s future. Analysts suggest converting the for-sale condo units into multifamily apartments if condo demand remains weak. This approach has precedent in nearby developments, which made similar conversions to meet market demands. The new owner will need to rethink the project’s retail component and design smaller residential units to align with current real estate trends.
“Too Big for the Area”
People in the comments shared their thoughts: “Lots of Angelenos familiar with downtown and the real estate market thought this project was way too big for the area and any potential market and questioned its viability back in 2014.”
One commenter said: “Downtown LA is the ghetto. Why would you build billion dollar skyscrapers in the ghetto?”
Another person added: “if they ever finish the building they should incorporate some of it into the design if they sort out the offensive stuff.”
Potential to Be Reborn
The saga of Oceanwide Plaza highlights the complexities and risks of large-scale urban development. What began as an ambitious project to transform downtown LA into a vibrant hub now stands as a cautionary tale of financial mismanagement, geopolitical tensions, and shifting market demands. However, with the right investment and vision, there is potential for Oceanwide Plaza to be reborn, offering a new chapter in LA’s ever-evolving urban landscape.
Repurposing Unfinished Developments
What do you think? How can urban development projects better anticipate and mitigate financial and geopolitical risks? What role should government agencies play in ensuring the completion of large-scale developments like Oceanwide Plaza? How can cities repurpose unfinished or stalled developments to meet current housing and commercial needs?
Watch the entire video on Klign’s YouTube channel for more information here.
