As of July 2, 2020, at least four mechanics lien claims have been filed against the Oceanwide Center mixed-use project in San Francisco, CA, totaling $48 million in unpaid construction work, according to the lien affidavits. The entire project includes properties that stretch from two perpendicular streets in San Francisco along Mission Street and First Street.
Including the general contractor, three contractors have placed liens on the Oceanwide Center project owned by Oceanwide Center, LLC. Each mechanics lien was recorded with the San Francisco County clerk’s office.
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According to the San Francisco Business Times, construction of a 54-story residency and hotel tower on Mission Street was halted as of October of 2019. The entire project broke ground back in 2016 and is slated to include the second-tallest building in San Francisco, which continues to be constructed along First Street.
While still attempting to finalize a deal to sell off the property, current project developer Oceanwide Holdings spoke with the San Francisco Business Times about the Oceanwide Center project back in October. The developer stated, “In light of local market changes and economic uncertainties, Oceanwide has determined that a realignment of the work scope on the Oceanwide Center Project is necessary to keep the project sustainable.”
3 Contractors Place $48M in Lien Claims on the Oceanwide Center Project
The three different contractors are allegedly owed a total of $48,052,006 for work taking place at the Oceanwide Center project, which is located at both 50 First St. and 526 Mission St. in San Francisco.
According to the lien affidavits, the largest lien was filed by Malcolm Drilling, Inc., against Swinerton/Webcor Joint Venture pursuant to California statutes governing mechanics liens. On May 5, 2020, Malcolm Drilling placed a lien that was valued at $18,986,973 against the Ocean Center property. Two months later on July 2nd, the general contractor placed a second lien against the property, valued at $9,839,898.
According to a Release of Lien affidavit processed with the San Francisco County clerk’s office on July 2nd, Malcolm Drilling’s original $18.9 million mechanics lien claim is still under dispute and has not been paid. In total, Malcolm Drilling is currently owed $28,826,871 in unpaid construction work from the Oceanwide Center project, which represents 60% of the total funds withheld from the contractors on this mix-use job site.
Because of Swinerton/Webcor Joint Venture’s non-payment to Malcolm Drilling, the subcontractor is now faced with a mechanics lien claim of their own from the Oceanwide Center project.
On May 27th, Silverado Contractors placed a lien against Malcolm Drilling that was valued at $1,766,364 for work taking place at the First St. tower. Back in May of 2017, the Northern California Record reported that a complaint was filed in the San Francisco County Superior Court against Oceanwide Center LLC and Silverado Contractors for “private nuisance and injunctive relief.”
According to the report, the complaint was filed by First and Mission Properties LLC after their property’s roof was used without permission during the construction of the First Street tower.
Permasteelisa North America Corp. a lien claim worth $17.4 million against Swinerton/Webcor Joint Venture. The architecture firm placed their lien back on February 25, 2020.
A $1.6B Project Developed by Oceanwide Holdings
According to the builders of the Oceanwide Center project in Swinerton/Webcor Joint Venture, Oceanwide Holdings is the prime developer of this $1.6 billion project.
The project consists of two towers – one facing Mission Street and one facing First Street. According to Swinerton/Webcor Joint Venture, the project is slated to be completed by 2021 and will include a 169-room Waldorf-Astoria hotel, 265 combined residential units, and 1M square feet of large-floor plate office use. On First Street, the tower is slated to scale 910 feet and will include over 100 condos.
Developer Oceanwide Holdings is the same firm backing the Oceanwide Plaza project in Los Angeles, which has been costing contractors since July of 2019 in L.A.
Oceanwide Holds Attempts to Sell San Francisco Property Amid COVID-19
According to The Real Deal, Oceanwide Holdings has been attempting to sell off its San Francisco mixed-use project. The Real Deal’s report found that in January, the company was close to a deal that would sell the property for $1 billion, which would result in a loss of over $200 million.
Due to the COVID-19 pandemic and the inclusion of a new buyer, the transfer has continued to be delayed. The Real Deal has reported that a new deadline has been scheduled for September 30, 2020, between Oceanwide Holdings and a Beijing-based private equity firm to make the sale. Previously, the deal was scheduled to be made by June 30th.
The Real Dead has also reported that this new deal “entails a $700M payment upon closing and up to $500M three years later, depending on the development’s internal rate of return.”