Forget the graffiti. LA's most notorious skyscrapers have a much bigger problem

It was the graffiti that made the abandoned skyscrapers of Oceanwide Plaza in downtown Los Angeles infamous.

But the illicit work is low on the list of problems facing the bankrupt, billion-dollar development. With a potential fire sale of the residential, hotel and retail project approaching, a far more complex and expensive question looms over one of the region’s all-time real estate catastrophes: Can it be saved from the wrecking ball?

The fastest path forward for a new owner would be to complete the original plans for the three-tower development that ground to a halt in 2019 and stands about 60% finished. But some potential buyers and construction experts say that doing so is financially untenable, in large part because tenants would be scarce for the expansive retail space on the project’s bottom floors and a redesign would be very difficult for the oversized residential spaces in the towers above.

Instead, they say, the structures should be torn down to make way for something new.

“Believe me, somebody would have jumped forward with a viable plan if there really was one,” said developer Bill Witte, chief executive of Related California. Witte said he believes Oceanwide has “negative value because of the scale and the indeterminate amount of work that would have to be done to complete it.”

In other words, he believes it’s not worth the risk to try to fix Oceanwide Plaza.

And yet an unfinished complex in a prime location remains a lure to a handful of real estate investors with deep pockets.

Earlier this month, a federal bankruptcy judge set a Sept. 17 auction of the property, saying there are several potential bidders.

An April appraisal that real estate brokerage Colliers submitted in the bankruptcy case estimated the market value of the project at nearly $434 million. Colliers also projected a cost of $865 million to complete the buildings.

Broker Mark Tarczynski of Colliers, who is overseeing the efforts to sell Oceanwide, rejects the notion that demolition is the only option. He predicted last month that whoever buys Oceanwide Plaza will finish it.

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