By John Gittelsohn | Bloomberg

The bankrupt $1.2 billion Oceanwide Plaza project in Los Angeles, dubbed the Graffiti Towers after taggers spray-painted the abandoned complex, has been cleared for sale and possible completion more than seven years after the original Chinese developer ran out of money.

A joint venture between KPC Group Inc., a Southern California real estate firm, and Lendlease Americas Inc., a unit of an Australia-based construction and development company, offered cash and credit worth about $517 million to acquire the project and agreed to complete it at an estimated additional cost of $800 million.

A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A -- popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A — popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

“I am delighted to make the finding that this is a plan that meets all the requirements” for bankruptcy resolution, Judge Deborah Saltzman said, adding that she will enter an official order Tuesday.

The massive development — three towers of as many as 55 floors for residences, a hotel and retail space — has become a symbol of post-pandemic blight in downtown Los Angeles. Efforts to revive the project near the Los Angeles Convention Center and Crypto.com Arena, home of the Los Angeles Lakers, have taken on greater urgency as the city prepares to host the 2028 Olympics.

A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A -- popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A — popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

Oceanwide Plaza was about 60% complete when construction stopped in 2018 after the Chinese government cut off spending on overseas investments by the developer, Beijing-based China Oceanwide Holdings. The property was forced into bankruptcy in 2024 after daredevil taggers covered the buildings in graffiti and base jumpers parachuted from its towers, raising concerns that it was a safety hazard.

The bankruptcy exit deal faced objections from government agencies and some creditors. In a May court filing, the City of Los Angeles argued that the KPC-Lendlease group’s proposal lacked evidence it could finance completion beyond initial steps to light a 700-foot-long electronic billboard and open a parking garage. The group also had not moved to renew expired permits and entitlements for the project, the filing said.

A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A -- popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A — popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

On Monday, the city and other objectors withdrew their opposition, citing changes agreed to by KPC, including immediate removal of the graffiti and a back-up buyer if the deal doesn’t close. KPC also agreed to cover increased costs for additional tax, security, legal and architects’ fees.

“Completing this project is about far more than finishing a building,” Los Angeles Mayor Karen Bass said in a statement. “It’s about restoring confidence, reconnecting a vital commercial corridor, and unlocking the economic potential of one of the city’s most strategic destinations ahead of a transformative decade for Los Angeles.”

The KPC group initially agreed in February to acquire the property for $70 million in cash plus about $400 million in a credit bid based on its rights to unpaid construction bills and senior debt originally owed to a group of Chinese EB-5 investors, who financed the development in exchange for potential US resident visas.

A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A -- popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)A U-S Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A -- popularly known as the ''Graffiti Towers.'' The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A — popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)A U-S Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A — popularly known as the ”Graffiti Towers.” The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

Founded by Dr. Kali P. Chaudhuri, KPC owns and develops real estate in the US and India, including a Southern California hospital chain. It is building a 300-room hotel in Inglewood near SoFi Stadium and plans a community with 17,000 housing units in the city of Coachella, east of Los Angeles. The amount Chaudhuri paid for the Chinese EB-5 investors’ stake has not been made public.

“Our team is ready to move from planning to implementation, beginning with graffiti abatement and site cleanup, and ultimately delivering meaningful economic investment, jobs, hospitality and long-term community benefits for Los Angeles,” Chaudhuri said in a statement.

A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A -- popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)A U.S. Bankruptcy Court judge has cleared the path for sale of the abandoned graffiti-covered development in downtown L-A — popularly known as the Graffiti Towers. The ruling happened because of the withdrawal of objections by both the city of Los Angeles and Los Angeles County during a hearing on Monday. The site across from the Los Angeles Convention Center is seen on Tuesday, July 21, 2026. (Photo by Dean Musgrove, Los Angeles Daily News/SCNG)

Lendlease was the general contractor on the Oceanwide property before the bankruptcy but no longer leads construction projects in the US.

“The parties that have the most at stake have put their money behind the plan,” Sharon Weiss, an attorney for debtors in the bankruptcy, said during a hearing Monday. “That is the strongest possible evidence of feasibility.”

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