The Real Deal reported in early April that an offer connected to Sean Burton’s Cityview was becoming a backup of sorts in the Oceanwide Plaza bankruptcy sale.
Fast forward to late May and it looks as though Cityview might be moving to the forefront when it comes to deciding the fate of the mammoth project that sits unfinished on Figueroa Street, with three towers covered in graffiti across from L.A. Live in the heart of Downtown Los Angeles.
The Cityview-connected buyer is negotiating a purchase and sale agreement with the Oceanwide chief restructuring officer, according to a person familiar with the matter. That is not good for KPC Group and Lendlease, whose joint $470 million (mostly) credit bid was deemed by just about everyone but TRD to have the deal in the bag some weeks ago.
Now it’s a horse race, thanks in part to the City of Los Angeles raising questions about KPC’s proposal in a filing to the bankruptcy court handling the case. The city is an unsecured creditor in the bankruptcy case and, more importantly, would have to OK any changes in entitlements and various permitting matters for the project to resume.
Neither Oceanwide’s chief restructuring officer nor Cityview executives responded to a request for comment.
The latest turn in this matter came after a May 19 hearing to confirm KPC and Lendlease’s proposed $470 million purchase was delayed for the second time. The first delay came after the city asked for more time to vet the proposal from KPC and Lendlease.
It turns out that the city has serious doubts about whether Dr. Kali Chaudhuri’s KPC and Lendlease can get the project done. City officials have met with KPC, held discussions with Lendlease, and visited the graffiti-covered eyesore downtown, and they still don’t have enough information on financing and development plans of the would-be buyers, recent court filings reveal.
A spokesperson for the JV said downplayed the city’s concerns. “We continue to meet with the city, respond to questions in good faith and address outstanding issues as part of the ongoing review process,” the spokesperson said.
The city did not respond to a request for comment.
This isn’t the be-all and end-all of a KPC deal. The hearing on its bid has been rescheduled for July, so the city and the JV have until then to get in sync. Still, the other offer may be more appealing now.
It is an all-cash bid via an unknown foreign investment group, and the overseas investor has an agreement with Sean Burton’s Cityview to act as a fee-based developer. Cityview is well known in Los Angeles, and Burton is a familiar face at city hall, with service as chair on the L.A. Airports Commission and Mayor Karen Bass’s Executive Business Council to his credit.
Deals and moves
- Onni Group’s $408 million loan on Wilshire Courtyard is in special servicing. Onni owes about $384 million on the million-square-foot Miracle Mile office complex. The borrower requested the move prior to its July maturity date. It could be a workout play, considering Onni is apparently scrapping office expansion plans there in favor of housing. This is the loan’s second stint in special servicing.
- Dauntless Capital Partners sold a Marriott hotel in Old Town Pasadena for $65 million, or about $451,000 a room. The buyer is the little-known Cornerstone Hotel Group. The real estate was developed by R.D Olsen years ago. Dauntless paid $52 million for the property in 2021 as the pandemic weighed on Southern California’s hospitality market.
Wage war
Hoteliers can breathe a momentary sigh of relief. The Los Angeles City Council kicked the can down the road on a $30 minimum wage for hotel and airport workings that had execs sounding the alarm. The city council approved a delay, which postpones the wage increase until after the 2028 Olympics. It’ll still increase to $25 in July and continue until reaching $30 in January 2030. The vote came after a business coalition put a measure on the ballot that would have eliminated the city’s second-largest revenue stream, the Los Angeles Times reported.
Bonus
In case you missed the fun, check out TRD’s ICSC dispatch here.
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The Oceanwide Plaza saga: Sean Burton’s Cityview becomes backup for graffiti-covered eyesore