Foreclosure Sale for Oceanwide Plaza is On Hold

In a recent article published by Bianca Barragan of BizNow News, https://www.bisnow.com/los-angeles/news/construction-development/foreclosure-sale-of-incomplete-oceanwide-plaza-property-on-temporary-hold-120362?utm_source=outbound_pub_6&utm_campaign=outbound_issue_70067&utm_content=outbound_link_1&utm_medium=email

the pending forced sale of the struggling and unfinished Oceanwide Plaza has been put on indefinite hold.  The foreclosure action brought by the project’s EV-5 investors who claim they are owed more than $157M was called into question by the building’s contractor Lendlease who questioned the priority position of the EV-5 investors in the prospective payout.

  A protracted battle has raged since the shutdown of construction on the project in 2019 when the viability of the EV-5 program was called into question and construction funding stopped.  The EV-5 program was created 30 years ago to provide a vehicle for an investment pool of foreign investors who were promised a Permanent Residence Visa for a certain minimum cash investment in local real estate developments.  The EV-5 program subsequently ran into legality problems and allegations of fraud which stopped the funding of many Los Angeles projects, including Oceanwide Plaza.  It appears that the EV-5 program has once again gained approval but now will have to grind its way through the courts in order to redetermine the position of each outstanding lender in the foreclosure proceedings before the foreclosure action can proceed.  Lendlease was recently awarded an over $40M settlement which it has been unsuccessful in collecting.

The solution to the future of the huge and prominent property is unfortunately on hold for an indeterminant period of time.  Hopefully the question can be worked out in time for completion by the 2028 Olympics.

                        By John Nilsson