Developers Pursue City Incentives for Stalled Oceanwide Plaza Hotel Completion

A joint venture between KPC Development Co. and Lendlease is actively pursuing financial incentives from the City of Los Angeles to facilitate the completion of the Oceanwide Plaza project in Downtown Los Angeles. Following a federal bankruptcy judge's approval last month for the joint venture to acquire the site, the developers are now seeking an agreement to help finance the 184-room hotel component.

14th District Councilmember Ysabel Jurado introduced a motion this week, indicating the developers' interest in an incentive structure similar to those granted to other Downtown hotel developments. These agreements typically allow developers to retain a portion of the transient occupancy tax (TOT) revenue, which would otherwise go to the city, to support construction costs.

The Oceanwide Plaza complex, situated on 11th Street between Figueroa and Flower Streets, is planned to include 504 condominiums, a 150,000-square-foot retail podium, and a prominent LED sign, in addition to the hotel. The acquisition deal involves $517 million in credit and cash, with an estimated $800 million needed to finalize construction. Developers have also committed to cleaning up graffiti on the unfinished buildings, a process already underway and expected to conclude by the end of 2026. The motion has been referred to the Council's Economic Development Committee for review, with the developers offering $150,000 for a city-commissioned study on the project's needs. This pursuit of public incentives highlights a common strategy for de-risking and financing large-scale urban developments.