Punalu'u units being sold
By Andrew Gomes
Advertiser Staff Writer
The Ponds at Punalu'u, the financially troubled residential rental facility for seniors, is headed for sale to a Texas bank that won a foreclosure suit against the project earlier this month in Hawai'i Circuit Court.
Beal Bank, a private financial institution based in Plano, Texas, hasn't said what it plans to do with the facility if it becomes the owner.
The Ponds was described as Hawai'i's first assisted-living rental project when it opened in 1997 with 127 units for assisted and independent living, and a 26-bed dementia unit for people with Alzheimer's. A half-mile mauka of Kamehameha Highway near La'ie, the four-story, colonial-style building looks more like a hotel than a care facility for seniors.
The facility, which today has only 62 residents on month-to-month leases, has had low occupancy due in part to its remote location.
The Texas bank filed the foreclosure action last July against The Ponds at Punalu'u Assisted Living Inc., the Seattle-based developer that opened the facility.
Bruce Beard, president of The Ponds at Punalu'u Assisted Living, did not return phone messages left with his Washington office.
Beard's company stopped making payments on its $12 million mortgage in late 1998, about a year after The Ponds at Punalu'u opened, court records show.
The note, originated by Seattle Mortgage Co., was assigned to the U.S. Small Business Administration, which auctioned the bad loan to Beal Bank early last year.
Ted Pettit, a local attorney representing Beal Bank, said that in the next few weeks the bank plans to ask the foreclosure judge to approve a private sale of the facility to the bank or its designated nominee, probably a bank affiliate.
Last week the court appointed Guido Giacometti, a former asset manager at Kamehameha Schools, as commissioner to sell the facility at public auction or private sale.
Pettit said the project, on eight acres of leasehold land in Hau'ula, has been appraised at $3 million, whereas Beal Bank has the right to outbid anyone who offers less than $13 million— the value of the bank's mortgage and interest secured by the project.
The bank is one of the biggest privately owned financial institutions in Texas, with more than $4 billion in assets.
The bank primarily engages in buying and selling loans and debt, and has a number of commercial and residential properties listed for sale.
Pettit declined to say what Beal Bank plans to do with The Ponds at Punalu'u if it acquires the project as expected. A bank official could not be reached for comment last week.
Currently, The Ponds at Punalu'u is managed by Paradigm Senior Living, an independent operator based in Portland, Ore. Joe Kalani, general manager at The Ponds, said he does not expect any changes pending approval of a sale to Beal Bank.
The facility is in the process of obtaining an assisted-living license, and plans to apply for a six-bed addition under an expanded-care license that would allow The Ponds to provide more medical services, Kalani said.
The Ponds provides studio, one-bedroom and two-bedroom units to seniors for $1,800 to $4,500 a month, depending on the range of needed services, which include three daily meals, housekeeping, transportation, activities, medication administration, personal care and nursing consultation.
