Chinese developer halts work on LA megaproject to “restructure capital”

Work on a $1bn condominium, hotel and retail complex in the centre of Los Angeles has paused after its Chinese developer said it needed to recapitalise the project, the LA Times reported last week.

Beijing-based Oceanwide Holdings said it hoped to restart work on its Oceanwide Plaza in February.

The scheme is made up of three towers, one 55-storeys high and two at 40 storeys in height, on a 200,000 sq ft podium.

It is billed as providing "a new heart to downtown LA".

The company’s statement said interior construction at Oceanwide Plaza was "temporarily on hold" as the firm tried to "restructure capital".

It added: "Our decision to provisionally pause construction is solely based on these internal factors and nothing else. With more than $1 billion of equity already invested in Oceanwide Plaza, we look forward to investing more capital into the property and together, with Lendlease, remain committed to building this landmark project for LA."

The project, which has been built to its full height, was due to finish this year. It was designed by CallisonRTKL and is being built by Lendlease near the Staples Centre in the city’s entertainment district.

The LA Times reports that Frank Bush, the general manager of the city’s Department of Building and Safety, said his agency became aware of the pause after receiving a call on Friday from Lendlease saying it was cancelling a scheduled inspection.

Oceanwide is a public company, however its difficulty in shoring up the projects’ finances has raised concerns about the Chinese government policy of restricting capital outflows.

The Times notes that shutdown comes at a time when the FBI is investigating possible kickbacks to city officials from foreign real estate developers with downtown building projects.

The project is located across the street from the Staples Centre sports arena is expected to cost more than $1 billion. When completed it will contain 340 condos, a 183-key Park Hyatt Los Angeles hotel and the usual amenities, as well as more unusual ones, such as a dog washing service.

Image: CallisonRTKL’s rendering of the scheme

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