$1 billion downtown LA Oceanwide Plaza project stalled with millions of dollars in liens filed

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Construction on the massive $1 billion Oceanwide Plaza in downtown Los Angeles has ground to a halt, with at least six subcontractors filing mechanic’s liens on the property totalling $62.5 million as of Feb. 15.

Curbed LA says the developers owe more than $52 million to some of its contractors, based on a review of publicly available real estate records. Some of the liens from masonry, steel reinforcing and concrete pouring companies may have been paid.

However, a lawsuit filed in February in Los Angeles County Superior Court shows that $52.8 million owed to Webcor Builders—which recorded the largest mechanic’s lien against Oceanwide—is still outstanding.

”Obviously it’s a lot of money, right?” Webcor attorney William Eliopoulos told Curbed LA. “We’re out a lot of money on this.”

The project’s three high-rises are planned to include 500 luxury condos, a large shopping mall, and a 104-room five-star Park Hyatt hotel with 160 condos of the same brand.

The Los Angeles Times has that work on the project had temporarily stopped because of a potential “shortfall in financing from the project’s Chinese owner.” Oceanwide Holdings says it is aiming to “restructure capital for the project,” though the statement the developer issued did not explain how that would happen, or the describe the required funds to restart construction.

Complicating matters, Oceanwide has been named in an active FBI corruption probe into possible bribery and money laundering involving City Hall officials and real estate developers.

In January, Oceanwide’s general contractor, Lendlease, sent a letter to at least two subcontractors announcing that it was suspending construction activity on the site because Oceanwide had “failed to provide contractually required payments for both your and our work,” Curbed LA reported.

Lendlease added in the letter that “among other failures,” Oceanwide “failed to maintain the minimum contractually required funds” in the project’s escrow account.

“Our unwavering desire is to complete what we believe to be a landmark project for Los Angeles,” Lendlease vice-president Joe Wathen writes in the January letter. “For your hard work on this project, we offer our gratitude and the hope that we will resolve with Oceanwide the outstanding issues that necessitated this suspension so we can all get back to work.”

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