Oceanwide Project: Cost of Corruption, Inaction from City Hall
Some say, “how could they do that?” I question, “what took them so long?” The graffiti on Oceanwide is now a glaring wakeup call for our elected officials, who in my opinion had their heads beneath City Hall during the past 5 years as this project stood as a behemoth eyesore and blight to our city.
Oceanwide Plaza is a failed $1B project that has been linked to convicted city council member Jose Huizar. At one point the project was coined the “jewel” of the neighborhood. Huizar successor, Council member Kevin de León, spoke at a SPBID meeting last spring. SPBID’s Executive Director, Nolan Marshall, implored de León “to act with urgency and address the immediate security of the building and the surrounding pedestrian walkways.” The councilmember’s response was that “the city does not have $1B to take over the project.” He said he would reach out to his “contacts in Qatar to see if they were interested in buying the project.” Over 8 months went by, and our councilman did nothing to secure the building!
According to Attorney and South Park resident, Marc Schecter, he believes the city needs to put a completion bond in place for any sizable building project. “The L.A. City Attorney, Hadee Feinstein Soto, is responsible for public nuisances.”
According to an article on Feb 9, 2024, by bisnow.com/los angeles, “Oceanwide has also faced multiple lawsuits from more than 30 contractors on the project who say they were not paid millions of dollars of work. Those contractors have placed mechanics’ liens on the property. In 2021, Oceanwide anticipated the cost of resolving the lawsuits and legal issues relating to the development, not including legal fees, to be a little over $220.4M. The developer is facing an additional lawsuit from EB-5 investors in the project who say they are owed $157M. On a subsequent publication, bisnow.com published that Lendlease and four other contractors filed a claim for $4.3M against Oceanwide Plaza LLC, for unpaid services. The L.A. council voted on Feb. 16 to approve just under $4M of city funds to secure the ground level and add fencing at the site and they too want to recoup those expenses from the owner.
On Feb 15, in an email exchange with Councilman de León and his staff, South Park resident and Attorney David Dapper wrote, “I see that Lendlease filed an involuntary bankruptcy petition against Oceanside this week. Of course, a bankruptcy filing does not stay a public entity’s actions to enforce its police or regulatory power. That would include a H&S receivership to force the sale of the property at no cost to the City…While I am encouraged by the City’s commitment to secure the site and abate the graffiti, it’s clear a long-term solution is necessary.” Has the City Attorney’s office been asked to investigate the viability of a forced sale through a H&S receivership?” To paraphrase, a health and safety receivership under California Health and Safety Code § 17980.7 (c) is an immediate and comprehensive systematic tool that ends issues with problem properties without any costs to the city.
https://www.calreceivers.com/health-and-safety-receiverships .
It is time that we demand action, that our city officials force the property into receivership, and facilitate a sale to a worthy buyer. It’s time that these unfinished, unsafe, and vacant buildings be put to beneficial use. I am sure City Attorney Feldstein Soto is waiting to hear from you - email: cityatty.help@lacity.org.
By Marty Goldberg