Onni Group wants its money back.
The Canadian real estate firm is suing Nexstar Media Group over a $95 million deal for a building in Downtown Los Angeles that fell apart, claiming the television network must return its $30 million deposit, according to a court complaint filed with Los Angeles Superior Court earlier this month.
Onni offered to buy 222 West 2nd Street, a property once part of the Los Angeles Times’ campus in Downtown Los Angeles, before the newspaper moved to El Segundo in 2018. Nexstar owns the site, as it did with other parcels once occupied by the Times.
Neither Onni or Nexstar responded to requests for comment.
After Onni entered into a purchase and sale agreement for the property in 2021, the firm allegedly discovered that “several material facts as represented by Seller turned out to be untrue,” Onni said in its complaint.
The site was dually entitled for one of two projects — either a 55-story, 680-unit apartment tower or a roughly 530,000-square-foot office project, according to marketing materials for the project. Nexstar hired Eastdil Secured in 2019 to market the property for sale.
Onni was willing to build either — but was attracted to the property given it was supposed to be near a planned public park, funded and designed by the City of Los Angeles.
But in 2023, the city decided to redevelop the parcel into housing for the homeless.
“So what had originally been one of the most ideal appurtenant parcels of property to a
luxury multifamily redevelopment, was turned into arguably the least desirable appurtenant parcel when trying to attract residential tenants to a luxury multifamily development,” Onni said in its complaint.
The city’s decision spurred Onni from wanting to build on the site, the firm said in its complaint, and constitutes a “material change in circumstances” and justifies the return of the $30 million deposit.
The project also had to be coordinated with the Los Angeles County Metropolitan Transportation Authority, given Metro’s future plans for a station next to the property.
During due diligence, Onni allegedly discovered that more coordination was needed with Metro. The agency requested Onni to “structurally model the entire MTA station,” a request that was allegedly never presented by Nexstar to Onni when the sale agreement was first signed.
Onni Group, which owns hundreds of apartments and millions of square feet of office space across Los Angeles County, bought another portion of the former L.A. Times campus in 2016, spending $105 million.
But that site — 202 West First Street, which houses the physical L.A. Times building — has been virtually unchanged since then.
“Onni has still not broken ground on this portion of the campus even though purchased in 2016, in no small part to the rising crime and homeless issues in Downtown Los Angeles,” the firm said in its complaint.