There’s a saying about best laid plans.
Joel Schreiber — known as the first investor in WeWork (WE) — bought the former Broadway Trade Center in Downtown Los Angeles in 2014 with a joint venture, and has since announced different plans for its transformation: from a massive creative office redevelopment to the “largest physical metaverse hub in the world.” But none has come to fruition.
SEE ALSO: Retail-to-Resi Plans Secure Loan in Los Angeles
Now, Schreiber has filed a Chapter 11 petition in a New York bankruptcy court ahead of a planned foreclosure sale after lender Starwood (STWD) declined to grant an extension for $214 million in debt for the property, The Real Deal reported.
“The ramifications of the COVID-19 pandemic over the last few years have taken a great toll on the intended development,” Schreiber wrote in the petition. “Despite obvious challenges, the debtor still believes strongly in the property and has elected to commence this Chapter 11 case to prevent an immediate foreclosure and gain one last opportunity to salvage the project.”
The historic 1.12 million-square-foot property is completely vacant and takes up half a city block at 801 South Broadway, just two blocks from Pershing Square. Schreiber’s Waterbridge Capital acquired the property with Continental Equities for $122.3 million in August 2014, and secured entitlements for 624,500 square feet of office and 345,000 square feet of retail space, along with more than 100 hotel rooms and residential use. The owners have also tried selling the property multiple times, with past off-market listings showing Broadbridge had asked for $425 million.
Earlier this year, the owners said they found a buyer with tech startup Emcee, which had its own ambitious plans to support a new metaverse platform, along with new hotel and coworking space. But that plan was not mentioned in the bankruptcy petition, according to TRD.
Gregory Cornfield can be reached at gcornfield@commercialobserver.com.
