The troubled Chinese-owned Oceanwide Center development at Mission and First, construction of which was fully halted a year ago, may face more troubles ahead as the Chinese economy faces a crisis that's pegged to real estate conglomerate Evergrande.
Lawsuits have been flying from unpaid contractors, and the future of the two-tower Oceanwide development is very much up in the air. As the SF Business Times reports, while Oceanwide Holdings Group has been trying to offload the property for over a year and a half, it's been so far unsuccessful, and it's looking less and less likely that money to salvage things is going to come from China.
Bloomberg notes that the outcome of the Evergrande debt crisis — which has reportedly ballooned to over $300 billion — is likely to either further spook Chinese investors, or encourage them to help Oceanwide out of the hole it finds itself in. This may depend on whether the Chinese government opts to bail out Evergrande, which so far they've signaled they won't be doing.
The Oceanwide Center development broke ground in late 2016, promising a flashy new, 61-story tower designed by Norman Foster, as well a shorter tower beside it — the latter meant to become condos and a Waldorf-Astoria hotel. Construction on the shorter tower was halted before the pandemic began, in October 2019, in an early signal of Oceanwide's troubles. And by December that year, Oceanwide had put the whole thing up for sale for $1 billion.
A deal announced in January 2020, involving Beijing-based private equity firm Hony Capital, fell through about a year later. And now, multiple contractors are trying to get their bills paid — including Webcor, which has an $11.5 million mechanic's lien on the property, one of several, and in July the company filed suit against Oceanwide to force the sale of the property.
The SF Business Times has heard rumors, but can't confirm, that Boston Properties — which was involved in the development of Salesforce Tower — may be negotiating to partner with Oceanwide in order to complete the project as planned.
If that doesn't happen, this whole thing could spiral further, and there will be no Norman Foster tower at First and Mission.
There will, however, still potentially be a 75-story Norman Foster-designed tower tucked behind the PG&E headquarters building at 50 Main Street, if developer Hines gets what they're asking for from Planning.