Downtown Los Angeles\u2019 infamous eyesore is one step closer to being cleaned out.<\/p>\n
The skyscraper known as the Graffiti Towers \u2014 officially the Oceanwide Plaza development \u2014 has reached a bankruptcy exit agreement that paves the way for a potential sale, court records show.<\/p>\n
A federal bankruptcy judge on Tuesday signed an order<\/a> approving the agreement<\/a>, which was filed on Jan. 28 and resolves various disputes between creditors.<\/p>\n Lawyers for Oceanwide argued in the Jan. 28 court filing that the agreement would put an end to \u201cvalue-destructive litigation\u201d and allow Oceanwide to focus on selling the project and confirming a plan.<\/p>\n \u201cA prompt sale and eventual completion of the Project is a major priority for the City and the public at large, particularly with the upcoming 2028 Olympic Games in Los Angeles,\u201d Oceanwide\u2019s lawyers wrote.<\/p>\n The settlement is a \u201ccritical step\u201d toward selling the property, which will allow for the \u201cpermanent removal\u201d of graffiti and \u201cpermanent elimination of safety concerns at the Property,\u201d they continued.<\/p>\n The real estate broker managing the sale, Mark Tarczynski of Colliers, declined to comment.<\/p>\n A potential investor is in talks to acquire the property, but the deal depends on the bankruptcy being resolved, as reported<\/a> by Bloomberg, citing unnamed sources.<\/p>\n The settlement agreement resolves various legal battles between creditors over the order that they get repaid in, sets the amounts of the claims and provides a \u201cframework for a consensual chapter 11 plan and sale, and a distribution waterfall for the proceeds from a sale.\u201d<\/p>\n Under the agreement, L.A. Downtown Investment LP will receive a $230-million claim, while the \u201cmechanics\u201d liens \u2014 which are typically associated with unpaid construction work and are held by Lendlease (US) Construction Inc. and DTLA Funding LLC \u2014 total $168 million.<\/p>\n The agreement also includes a $20-million payment from Lendlease (US) Construction Inc. to Chicago Title Insurance Co. to resolve disputes between the two companies.<\/p>\n Oceanwide Plaza, located across Figueroa Street from Crypto.com Arena and on the site of a former event parking lot, was once envisioned as a crown jewel of downtown Los Angeles.<\/p>\n The Chinese-backed, mixed-use development project would have included more than 500 condos and 180 hotel rooms across three towers. It would have also included nearly 170,000 square feet of shops and restaurants.<\/p>\n \u201cThe draw power of this location is tremendous. We\u2019re in the heart of the entertainment and sports district,\u201d Thomas Feng, then-chief executive of Oceanwide\u2019s American subsidiary, told The Times in 2016<\/a>.<\/p>\n The $1-billion development started in 2015 and was originally slated to be completed in 2019. But construction stalled in January 2019<\/a> as the owner \u2014 the publicly traded, Beijing-based conglomerate Oceanwide Holdings \u2014 ran out of money to pay contractors.<\/p>\n As the luxury building sat vacant, taggers armed with spray paint flocked there, hoping to leave a colorful mark on the city skyline. Some even filmed themselves<\/a> walking on ledges of the unfinished skyscrapers.<\/p>\n In 2024, the Los Angeles City Council allocated $3.8 million<\/a> to clean up and secure the building. About $2.7 million was allocated for security services, fire safety upgrades and graffiti abatement. Another $1.1 million was set aside to build fences and secure the ground floors of the building.<\/p>\n Oceanwide Holdings also planned to build two skyscrapers in San Francisco\u2019s Financial District, but construction halted in 2020 after the company ran out of money, the San Francisco Chronicle<\/a> has reported.<\/p>\n