Chinese real estate conglomerate Oceanwide Holdings has some explaining to do.
The developer has been ordered to appear before a federal court over the enforcement of a $42 million judgement in favor of Lendlease Construction, the general contractor on Oceanwide’s $1 billion mixed-use development in Downtown L.A. The virtual appearance is scheduled for Oct. 8th in the Central District of California, court filings show.
Meanwhile, Lendlease will exit the stalled project, a source familiar with the development said, leaving Oceanwide to find another contractor before it can resume construction.
One of the largest development projects in L.A., the so-called Oceanwide Plaza promised hundreds of condo units and a luxury hotel spanning three glass skyscrapers directly across from the Staples Center, plus a 150,000-square-foot open air mall.
But construction at the site halted abruptly in 2019 as contractors hit the developer with claims for more than $100 million in unpaid work. Undeterred, Oceanwide struck a $100 million agreement with Lendlease in March 2020 to resume construction, but missed scheduled payments just three months later.
A court-appointed arbitrator awarded $38 million to Lendlease late last year; its agreement with Oceanwide provided for expedited resolution should the developer miss payments. Oceanwide attempted to dismiss the judgment, arguing that Lendlease failed to maintain proper licensing during construction, but a judge denied that motion in June.
Now, Oceanwide must pay the original award plus interest and legal fees. The company did not respond to a request for comment. Lendlease acknowledged the court order in its favor but declined to comment further.
Oceanwide is attempting to sell trophy assets to finance its mounting debt, including a repeatedly stalled sale of its Oceanwide Center project in San Francisco and its Beijing headquarters, for which the developer is reportedly asking $3 billion.
The company’s debt-fueled expansion into international markets has caught the eyes of Chinese regulators, as $3.2 billion in payments owed to Oceanwide’s bondholders are scheduled to mature this year.
Oceanwide disclosed several high-profile resignations in July, including CEO Zhang Xifang and chief risk-control officer Chen Guoqi, the San Francisco Business Times reported.