LA's Notorious 'Graffiti Towers' Near Resolution as Bankruptcy Deal Clears Path for Sale and Cleanup
LOS ANGELES — The long-derelict skyscrapers blighting the downtown Los Angeles skyline, known widely as the "Graffiti Towers," may finally see a new chapter. A federal bankruptcy judge this week approved a critical settlement agreement among creditors, paving the way for a potential sale and the eventual cleanup of the infamous site.
The agreement, filed in late January and formally signed off on Tuesday, resolves complex disputes over how creditors of the Oceanwide Plaza development would be repaid. Lawyers for the developer, Oceanwide, stated the deal halts "value-destructive litigation" and allows the company to focus on selling the three-tower project. They emphasized that a "prompt sale and eventual completion" is a major priority for the city, especially with Los Angeles hosting the 2028 Olympic Games.
"This settlement is a critical step toward selling the property, which will allow for the permanent removal of graffiti and the permanent elimination of safety concerns," the court filing noted. The property's sale is being managed by Colliers, though broker Mark Tarczynski declined to comment. Bloomberg reported, citing unnamed sources, that a potential investor is in talks to acquire the property, contingent on the bankruptcy resolution.
The financial framework established by the agreement allocates a $230-million claim to L.A. Downtown Investment LP. Mechanics' liens—often tied to unpaid construction work—held by Lendlease (US) Construction Inc. and DTLA Funding LLC total $168 million. The deal also includes a $20-million payment from Lendlease to Chicago Title Insurance Co. to settle separate disputes.
Oceanwide Plaza, situated across from Crypto.com Arena, was once heralded as a crown jewel for downtown. Announced in 2015 as a $1-billion, Chinese-backed mixed-use development, it promised over 500 condos, a 180-room hotel, and extensive retail space. "The draw power of this location is tremendous. We're in the heart of the entertainment and sports district," Thomas Feng, then-CEO of Oceanwide's American subsidiary, told the Los Angeles Times in 2016.
Construction stalled in 2019 when Beijing-based Oceanwide Holdings ran out of funds. The vacant towers quickly became a magnet for graffiti artists and thrill-seekers, some of whom filmed themselves scaling the precarious structures. In response, the LA City Council allocated $3.8 million in 2024 for cleanup and security measures.
The saga of Oceanwide Holdings extends beyond LA. The company's similar skyscraper project in San Francisco's Financial District also halted in 2020 due to financial woes, and its parent company was delisted from the Hong Kong Stock Exchange last year.
Voices from the Community
Maria Chen, Downtown LA Resident: "Finally, some progress. These towers have been a depressing symbol of neglect right in our backyard. Cleaning them up before the world arrives for the Olympics is non-negotiable for our city's pride."
David Park, Urban Planning Consultant: "The financial and legal untangling here is remarkably complex. This agreement is a necessary technical precursor, but the real test is finding a buyer willing to take on a billion-dollar stalled project in a shifting market."
Rebecca "Bec" Vance, Local Artist & Activist: "This is a disgraceful waste. They poured a billion into a ghost town while people sleep on the streets below. The graffiti was an inevitable, vibrant response to corporate failure. Now they'll just sanitize it and sell it to another developer who might fail again. The priority should be housing people, not polishing towers for the Olympics."
James Miller, Retired Contractor: "I worked on the early phases. It's sad to see it like this. That settlement needs to ensure the subcontractors and workers who weren't paid finally get what they're owed. That's the real justice needed here."