By Andrew McIntyre

Law360 (February 8, 2021, 4:14 PM EST) -- California's tallest tower under construction is currently on hold and developer Oceanwide Holdings, with help from various lawyers, has tried twice during the COVID-19 pandemic to sell the project.

Plans for the two-tower Oceanwide Center project, which has been in the making for more than 15 years, call for a mix of office and residential condo space across the taller 61-story, 910-foot tower, the tallest Golden State building under construction, according to the Council on Tall Buildings and Urban Habitat.

The combined two-tower project at 50 First St., which is the subject of multiple lawsuits, is slated to have 2.4 million square feet, including roughly 1 million square feet of office space, 265 residential units, 169 Waldorf Astoria hotel rooms, retail space and a public plaza and square.

Reuben Junius & Rose LLP has for more than a decade helped Oceanwide Holdings Co. Ltd. with numerous planning aspects, while Varela Lee Metz & Guarino LLP is counseling a venture that provides construction services to Oceanwide on a suit against that venture and Oceanwide.

While juggling potential sales, construction delays and lawsuits, Oceanwide has also been trying to wrap up its 2016, $2.7 billion purchase of Genworth Financial Inc. with help from Sullivan & Cromwell LLP and Potter Anderson & Corroon LLP.


In early 2020, before the pandemic swept across the U.S., Oceanwide was under contract to sell the project to SPF Capital International Ltd. for roughly $1 billion, but as the pandemic rapidly spread across the U.S. in March, it became clear that deal might not go forward.

Lawyers and city officials ramped up their communications in March as the parties sought to stay on top of the developing situation. Oceanwide has looked to Reuben Junius partner Daniel Frattin for counsel, and records obtained by Law360 show that Frattin, who joined Reuben Junius in 2006, has worked on the project for more than a dozen years.

Frattin, who was in the thick of those March 2020 conversations, declined to comment.

"It has been challenging to get [a call with the various parties] scheduled with changeover in the planning director and the public health situation," Frattin wrote in a March 18 email, obtained by Law360, to San Francisco planning officials and Paul Hastings LLP partner Mitchell Menzer. "Mitch, it would be helpful for you to generate a list of key topics that you'd like to cover, so I can give [Oceanwide] a bit of advance warning."

Menzer's role in those March 2020 talks was to consult with the city on behalf of would-be buyer SPF Capital and its partner Mack Real Estate Group, according to email correspondence obtained by Law360. Menzer told Law360 he couldn't comment on the matter.

"Oceanwide Center is a very challenging project indeed, but one that would be a true landmark for San Francisco," Menzer wrote to San Francisco planning officials on March 25 in an email obtained by Law360.

The SPF sale ultimately fell through at the end of March.

"The deadline for due diligence came last week on 3/25, and the parties were not able to reach agreement," Eddie Pang, associate director of design and development for Oceanwide Center LLC, wrote to San Francisco planning officials on March 30 in an email obtained by Law360. "Meanwhile, construction of the basement structure continues on site with the aim of reaching back to grade in Q4 this year. Of course, the developing situation with the COVID-19 pandemic may introduce impacts that are uncertain at this moment."

Pang couldn't be reached for comment.

Meanwhile, on March 29, Oceanwide signed a new agreement to sell the project to Chinese private equity shop Hony Capital, according to an Oceanwide filing on the Shenzhen Stock Exchange. The new Hony Capital deal was reportedly worth $1.2 billion.

That sweetened sale, though, hit another delay later in the year. A Shenzhen Stock Exchange filing from Oceanwide shows the parties extended the deadline to wrap up that deal until the end of 2020, citing the challenge of conducting due diligence amid the pandemic. Media reports this summer had also indicated the deal had been delayed.

Oceanwide couldn't be reached for comment for this article.

The project has been in the works for years.

After getting entitlement, the company broke ground in late 2016, and subsequently received financing from Industrial and Commercial Bank of China Ltd. in 2018, according to a mortgage document made public in San Francisco in September 2018.

Foster and Partners and Heller Manus Architects designed the project, while Heintges Consulting Architects & Engineers PC, a New York and San Francisco consultant that works in the areas of curtain walls and building envelopes, also lists the project on its website. Representatives at those three companies couldn't be immediately reached for comment.


Meanwhile, as Oceanwide was trying to sell the project for the second time, the developer and related parties were hit with a series of lawsuits.

In late September of 2020, Malcolm Drilling Co. Inc. sued Oceanwide as well as a venture of Swinerton Builders and Webcor, which provides construction services to Oceanwide, alleging breach of contract and foreclosure of a mechanic's lien.

Then, in mid-November, the project was hit with two additional suits. Italian engineering firm Permasteelisa North America Corp. sued Oceanwide on Nov. 16, alleging breach of subcontract, breach of settlement agreement, breach of covenant of good faith and fair dealing, and mechanic's lien foreclosure.

And a day later, Silverado Contractors Inc. sued Oceanwide, alleging foreclosure of mechanic's lien.

While Oceanwide continued work on the taller of the two towers through the beginning of the pandemic, the company in late 2020 halted work on the project. A representative for the Office of Mayor London N. Breed recently told Law360 that work stoppage had not been ordered by the city.

In addition to juggling the project and the lawsuits, Oceanwide last year also tried to wrap up its 2016 deal to buy Genworth, and after more than a dozen extensions to that initial agreement, the companies failed to meet the latest, end-of-2020 deadline to close the deal.

In early January, Genworth announced that deadline had lapsed, and said financing for the deal, part of which was to be provided by Hony Capital, remained a sticking point.

And on Jan. 15, Beijing-based Oceanwide Holdings announced its company auditor, BDO Ltd., had resigned, and said its board had appointed Yongtuo Fuson CPA Ltd. as the company's new auditor.

At the time of writing, it was unclear what Oceanwide's plans were for the project, and the company did not respond to multiple requests for comment. The Council on Tall Buildings and Urban Habitat's listing indicates the project is now "on hold."

Oceanwide Holdings is represented on various aspects of the project by Daniel Frattin of Reuben Junius & Rose LLP.

Mitchell Menzer of Paul Hastings LLP consulted with San Francisco officials on behalf of SPF Capital and Mack Real Estate Group.

Malcolm Drilling is represented in its suit by David Weaver of Oles Morrison Rinker & Baker LLP. Swinerton Webcor is represented by Andrew Van Ornum of Varela Lee Metz & Guarino LLP. That case is Malcolm Drilling Co. Inc. v. Swinerton Webcor et al., case number CGC-20-586851, in the Superior Court of the State of California, County of San Francisco.

Silverado Contractors is represented in its suit by A. Robert Bosin and Timur Bilir of Leonidou & Rosin PC. Defendant-side counsel information was not immediately available. That case is Silverado Contractors Inc. v. Oceanwide Center et al., case number CGC-20-588224, in the Superior Court of the State of California, County of San Francisco.

Permasteelisa North America is represented in its suit by Christopher Bunge of Watt Tieder Hoffar & Fitzgerald LLP. Defendant-side counsel information was not immediately available. That case is Permasteelisa North America Corp. v. Oceanwide Center LLC et al., case number CGC-20-588256, in the Superior Court of the State of California, County of San Francisco.

Oceanwide is represented on the Genworth deal by Sullivan & Cromwell LLP and Potter Anderson & Corroon LLP.

--Editing by Alanna Weissman and Marygrace Murphy.

This is the second article in a five-part series looking at the tallest towers under construction in five states. The prior story looked at 6X Guadalupe in Austin, while the next article focuses on the tallest Illinois tower under construction.

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