Site acquired for L.A. high-rises
After a long wait, a Chinese firm’s massive downtown project moves forward.
Chinese developer City Century has acquired a prime development site across the street from L.A. Live in downtown Los Angeles where it intends to build a $1-billion housing and retail complex called Olympia.
City Century recently closed the long-pending $121-million acquisition of a site on Olympic Boulevard alongside the 110 Freeway, where it announced in 2016 that it intended to build three high-rises on the site of a former medical clinic lying between L.A. Live and the Metropolis residential and hotel complex.
The acquisition comes at a time when other big Chinese developers have pulled back from overseas investments.
Chinese government policies put in place in 2016 have restricted the flow of money out of the country, and a nearly 2-year-old trade war between the U.S. and China have taken a toll.
Direct investment by Chinese companies in the U.S. has fallen from a six-month average of more than $20 billion in 2016 and the first half of 2017 to less than $5 billion on average in the last two years, according to July data from Rhodium Group.
U.S. commercial real estate received $1.4 billion from Chinese investors in the 12 months through September, a 76% plunge from a year earlier, according to Real Capital Analytics.
The impact has been felt in Los Angeles, which has been the subject of billions of dollars’ worth of Chinese investment in existing hotels and ground-up development, including the Metropolis condominium, hotel and apartment complex nearing completion.
Another major Chinese development downtown, Oceanwide Plaza, has been
stalled since January, bringing widespread attention to the rare sight of a three-skyscraper construction site devoid of activity, its three cranes idle. The condominium, hotel and retail project, valued at more than $1 billion, was being built by Oceanwide Holdings, a publicly traded international conglomerate.
Oceanwide Holdings faces more than $50 million in mechanic’s liens by contractors who say they are owed money by Oceanwide. The developer said in an April court filing that it had spent about $860 million on the project and was trying to get loans valued at more than $275 million to complete it.
“It appears they wanted to self-fund the entire project,” an attorney representing two of the Oceanwide subcontractors told Bloomberg in October. “Now with the changes in Chinese government policy, the owner is trying to find a traditional construction loan while in the middle of construction.”
City Century is the Los Angeles subsidiary of Shanghai real estate developer Sheng-Long Group, which develops real estate in China, Australia and the U.S.
City Century’s Olympia complex could cost as much as $1 billion and house as many as 1,367 apartments or condominiums over shops and restaurants along Olympic Boulevard.
The sale by a group of physicians who owned the 3.3-acre parcel at Olympic and Georgia Street, formerly occupied by a HealthCare
Partners facility, had been in escrow since 2015 because it was contingent on City Century securing city approval for the project. That approval has been secured.
The buyer paid $121 million, according to real estate data provider LandVision.
“This is one of the best, larger pieces of development land in downtown L.A. because of its proximity to L.A. Live as well as the convention center and the freeway,” said real estate broker Mark Tarczynski of Colliers International, who represented both parties in the sale.
Olympia will be “a worldclass project that will be an exciting and dynamic addition to the Los Angeles skyline and downtown community,” said Arthur Chang, City Century’s director of development and operations.
“The Olympia project enjoys strong support from its downtown neighbors, including business organizations and unions. With the city having now granted approval of the project entitlements, we are looking forward to the next phase of work,” Chang said.
Representatives of the sellers did not respond to requests for comment.
The design for Olympia by architects Skidmore, Owings & Merrill calls for slim towers of 43, 53 and 65 stories that would be connected at the lower levels with dining, shopping and landscaped outdoor spaces.
The complex at 1001 W. Olympic Blvd., just east of the 110 Freeway, would replace a medical office building, a former tire store and parking lots.