Developer Savio hoping to rebound after bankruptcy
By Andrew Gomes
Advertiser Staff Writer
Hawai'i developer Peter Savio is on an invigorated mission to rebuild his development company following bankruptcy, having recently made what he said are offers to buy more than $1 billion of real estate.
Advertiser library photo • May 5, 1996
"I am on a buying spree, and I am looking for more acquisitions," the residential developer said late last week.
Peter Savio still can raise money to finance deals.
Savio has made a business out of buying leasehold apartment rental buildings and reselling units as fee-simple condos at below-market prices. Since 1981, he has completed about 3,500 such condo conversions.
Now Savio has committed his interest in buying 20 properties, which he did not identify, in addition to four other previously reported deals.
Recently, Savio struck a purchase contract for the 235-unit Prince Tower at Queen Emma Gardens for about $18 million.
Savio also anticipates closing deals for a trio of Outrigger Enterprises buildings in Waikiki for an estimated $15 million.
Mel Kaneshige, chief executive officer of Outrigger Enterprises, said the company has signed a contract to sell Savio the 136-unit Ohana Ala Wai Towers hotel.
Outrigger, which operates the state's largest hotel chain, is negotiating to sell Savio the 144-unit Tradewinds Mauka apartments and the 47-unit Ala Wai Terrace apartments, Kaneshige said.
The Hobron Lane area properties, once promoted as a site for the Convention Center, were put on the market early last year to raise cash for Outrigger to reinvest in its core resort product.
Two of the three properties are leasehold: the 40-story Ala Wai Tower and 3-story Tradewinds complex. The 16-story Ala Wai Terrace is fee simple.
Savio said he is interested in acquiring the fee on the two leasehold properties from landowners. But he is initially pricing units for sale as leasehold property.
Prices should range from $15,000 to $20,000 for Tradewinds units and from $28,000 to $85,000 for units in the hotel, which Savio plans to rename Waikiki Marina. Fee-simple units at the Ala Wai Terrace are expected to cost about $150,000.
The developer is doing business under Hawaiian Island Development Co. Inc., which he formed in April after initiating bankruptcy liquidation of Savio Development Co.
Savio's financial trouble stemmed from loans the company made to help buyers purchase units in the early to mid-1990s. About 100 to 150 loans went bad, and defaults by customers led to Savio Development defaulting on loans with its lenders.
To protect other assets from one lender that Savio called unreasonable, he also placed into Chapter 7 liquidation his holding company, Savio Inc., and filed for personal Chapter 11 bankruptcy reorganization.
Savio Inc. had about $135 million in revenue last year, making it one of Hawai'i's largest companies.
The developer said the bankruptcies have not hurt his ability to raise money for properties he wants to buy.
The properties Savio has under contract are being purchased with local and Mainland partners and financed by Mainland lenders who Savio has declined to identify.
Of course, Savio is not likely to succeed in acquiring every property he bids for, but he views his bidding spree as a good start to make his new company "bigger and better" than his previous business.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
