Elbtower to Hamburg, Lamar to Vienna and Oceanwide Towers to Los Angeles. Plans for the massive project were presented in 2015: three towers would house 500 luxury apartments and a five-star hotel – in a central location across from the LA Lakers basketball arena and cost a billion dollars (930 million euros). The builder is a Chinese company. A cooling of Sino-US relations under then-US President Donald Trump and an overheated Chinese real estate market led to a halt in construction in 2019.
Since then, the towers have become a symbol of the housing crisis in metropolitan California. Unfinished towers take up valuable living space. Additionally, there is a safety risk when there are paragliders and graffiti sprayers on the construction site with three towers planned to be 49 or 40 stories high – and thieves who have stolen all the copper cabling.
To add insult to injury, there is ridicule
With the Grammy Awards earlier this month, the hoax compounded the damage as pictures of luxury towers allegedly painted over with graffiti spread around the world. Finally the municipal administration lost patience. He recently gave construction company Oceanwide Holdings a Sunday deadline to effectively secure the site and remove graffiti.
However, as the “Financial Times” said on Saturday, the chances of this happening are slim. According to the report, Oceanwide Holdings was dropped from Hong Kong's benchmark index for mid-market companies, the Hang Seng Index, in 2017 as China's real estate market cooled. Two years later, construction stopped altogether – the reason: construction companies complained that Oceanwide was no longer paying the bills. The next step came in early January this year: the parent company announced it was liquidating the company.
There is a risk of cost savings to the city
The city of Los Angeles is threatened with cost overruns — construction site security costs alone are estimated at $3.8 million. It's highly doubtful that Los Angeles will have much success recouping those costs from Oceanwide.
It is unclear whether another real estate group will be found to take over the failed project. According to the Financial Times, there have already been calls for the unfinished towers to be used to ease the housing crisis – with thousands of homeless people living three kilometers to the west. But it will take years to meet and adapt to the new requirements – and there could be huge opposition from residents to building thousands of social housing units in the middle of a vital entertainment and business district.
