Turtle Bay Resort Faces Foreclosure

The state made two offers to the lenders to buy the property but the lenders have rejected the same. The office of the Governor Linda Lingle said that the state was ready to continue with further talks. The interim manager of the resort said that that the acquisition by the government by making use of public funds would not be prudent considering the health of the weak economy.

The lenders had appointed Stanford Carr to sell the property – this being part of a foreclosure agreement with Oaktree Capital Management. He said, “Given our economic outlook in the near term, money should be expended and deployed for better uses.” The resort continues to generate interest but Carr was reluctant to disclose the details of the potential buyers.

About a year ago, Governor Lingle had promised in her official address that the government would try to buy the resort so as to block the building of an additional number of units including hotels and condos. But the lenders (Credit Suisse Group and Wells Fargo among others) were not amenable.

The state explained that its plan would have lessened or completely eliminated using of taxpayer’s money to purchase the land. Other entities would have been involved to buy the hotel, golf courses and business units that are existing.

Ted Liu who is the director of the Department of Economic Development and Tourism of the state said, “Under the current economic and capital markets climate the state continues to be a qualified and, we believe a preferred purchaser. We also continue to stand ready to participate in or facilitate a transaction that would preserve the majority of the land in open space.”

The state government made the offer keeping in view the current value of the property and the importance of seeing to the running of the hotels and the interests of the condo residents.

Linge had taken the lead in the previous year to pass a law that would give a free hand to the state to proceed with negotiations regarding the deal. The priority was to protect the about 1,300 acre of land stretching from Kahuku Point to Kawela Bay.

Carr said the residents of North Shore are supporting the idea of modest development of parts of the rural coastline for the sake of economic growth.