KPC Group’s Oceanwide Plaza Bet Started With a Supertall Dream for Manhattan

John Petty, senior partner for KPC Group, had just returned from a site visit at Downtown Los Angeles’ infamous “Graffiti Towers,” the beleaguered mega-development that his firm recently began working to resurrect after it stalled about seven years ago.

Like so much of the mixed-use project thus far, cleanup was proving to be tougher than expected.

The Chinese-funded project became internationally famous for its tagged exterior. On the 250 balconies of the hollow condo-hotel-retail complex, where graffiti artists focused their work during a tagging spree in 2024, cleanup crews found that they took their time. Much of the colorful artwork had a primer coat put down before the spray paint, and, on some of the murals, clear sealant was applied atop the finished work. Each balcony took between 45 minutes and three hours to clean, with some having a few layers of work to scrub. 

But, during a call with Commercial Observer, Petty said the work is progressing, and expected to finish in time to meet KPC’s agreement to complete cleanup within three months. It’ll eventually result in some new merch KPC hopes to sell in the development’s hotel lobby when and if they finish: Photos taken during cleaning will be turned into a coffee table book featuring imagery of the infamous graffiti.

When KPC, helmed by entrepreneur and orthopedic surgeon Dr. Kali Chaudhuri, emerged as a bidder in the auction for what was originally known as Oceanwide Plaza, the paucity of other players chasing the opportunity underscored the challenges of renovation. This was a project many felt was extremely difficult to finance and finesse. 

But, on July 21, during a bankruptcy hearing in federal court, KPC’s bid was cleared by a judge, giving the firm the opportunity to pay $517 million in cash and credit to acquire the unfinished project. That came with a six-month deadline to complete entitlements and secure additional funding, or else the development would be turned over to another bidder.  

That means sticking to the existing plan, expected to cost $850 million or more, to complete the 2 million-square-foot hotel-residential development, which will feature a massive LED screen that Petty called the Times Square of Los Angeles adjacent to Crypto.com Arena and entertainment complex L.A. Live. 

It’s another hurdle in what’s been an exhaustive process. Chaudhuri sees it as a marquee project, both for downtown and for his portfolio.

“He’s in legacy mode,” said Petty. “He is willing to sacrifice economics for something that he can be proud to have been a part of in creating, essentially, a trophy-type property in Downtown Los Angeles.”

It’s also the culmination of a much longer process to attach Chaudhuri’s name to a U.S. skyscraper. KPC emerged in 2010 as Chaudhuri reinvested his profits as a surgeon into what would become a growing, global health care and hospitality real estate empire, though not without its controversial projects and deals. Now, KPC is positioning itself for bigger developments, such as the plan to open the $300 million Kali Hotel later this year in Inglewood, adjacent to SoFi Stadium. 

Petty, who has worked for Chaudhuri for the last 15 years, said Chaudhuri had told him years ago that building a supertall building in Manhattan was “on his bucket list.” The search for such an opportunity is what initially led KPC to Oceanwide, the firm originally building the tower project in Downtown L.A. 

Petty had discovered that during Oceanwide’s 2015-2016 buying spree, the company purchased a development site at 80 South Street in Lower Manhattan from the then-Howard Hughes Corporation for $390 million, and even purchased some additional air rights it never was able to utilize. The site was long seen as an ideal spot for a skyscraper, with an excellent Lower Manhattan location and unobstructed waterfront views. 

Once Petty found out about the opportunity in 2020, he flew to New York City to check it out. At that point, DW Partners, a hard money lender, had already recouped the property after Oceanwide had defaulted on a loan. KPC went into escrow for the property. Architects had even sketched out possible designs — Santiago Calatrava did one for a previous owner in 2003, and design firm ATCHAIN sketched another potential plan for Oceanwide. 

But the opportunity fell apart. An adjacent property at 161 Maiden Lane was found to be leaning toward the 80 South Street property. Lawyers warned Petty that if it continued to lean and passed the property line, it would open up a litany of legal actions that would delay and bog down any project. KPC backed out and took its money out of escrow. 

But that interest in a potential deal for an Oceanwide property also led KPC to look at the Oceanwide Plaza site in Los Angeles. It’s not Chaudhuri’s New York City dream, but it is a lot closer to home.

“We’re getting a little bit of Manhattan without having to go to Manhattan,” said Petty.

Chaudhuri and Petty flew to Hong Kong in July of 2023 to negotiate directly with Oceanwide executives. The firm asked for $800 million for the property, which Petty and others found way too high, and negotiations fell apart.

But Chaudhuri didn’t give up. He would eventually purchase the rights to the EB-5 loan for Oceanwide Plaza that had gone into default. At the time, Petty said, the issue of priority of loans and liens wasn’t settled. That would happen later during a state court hearing. So Chaudhuri gambled on the chance to develop, only later getting the priority and opportunity to make a bid during the bankruptcy auction.

“That’s the nature of Dr. Chaudhuri,” said Petty. “If you ever have an opportunity to talk to him, he’s just a Type A of a Type A, and somebody whose instincts are better than anybody I’ve ever worked with before.”

Petty believes KPC is on track. The company is keeping the design the same as Oceanwide to make it easier and quicker to get entitlements from the city, and KPC believes they’re well on their way to making that happen, since the city has been very cooperative.

KPC did evaluate the potential of cutting up the existing floor plan to create smaller condo units, but determined that would open the firm up to more expenses and permitting issues, and could even bring up environmental review issues by increasing the density.

KPC believes there’s an opportunity to market these condos as investment opportunities for the emerging middle class in India and South Asia. Petty called these buyers “fertile ground.”

He also said they’re making progress with funding, and have been fielding offers from financial institutions and private equity firms, though he didn’t name any specific parties of interest. 

This massive, complicated project represents a big leap for KPC in terms of scale and scope. Petty argues that the firm is capable of delivering — it’s ahead of schedule on the Kali Hotel development, and, he argues, they know how to attract and manage talent.

“I don’t want to oversimplify it, but we also are very good at surrounding ourselves with extremely talented people,” he said. “Anything is possible when you have the right team to execute.

“If the question is: Could this be an indication of an appetite to take on bigger projects? The answer is yes,” Petty added.