Mokule'ia parcels potential ag estates

By Andrew Gomes
Advertiser Staff Writer

Largely undeveloped beachfront lands in Mokule'ia are being marketed as development opportunities for agricultural estate homes and vacation cabins by the financially troubled owner of Dillingham Ranch.

Washington state-based Metropolitan Mortgage & Securities Co. is offering to sell the preservation- and agriculture-zoned properties on O'ahu's North Shore, including the recently reactivated Mokule'ia polo field.

The real estate finance and development firm intends to sell the property that was part of an early 1990s resort and golf course development plan by a previous owner who needed a zoning change that the community staunchly opposed.

Metropolitan Mortgage is marketing eight parcels totaling 65 acres as potential agricultural estate homes and vacation cabin sites, which are permitted under existing zoning and could attract investor interest without community opposition.

"Basically people are opposed to any rezoning," said area neighborhood board representative Kathleen Pahinui. "We wish (the seller and prospective buyers) luck. We just don't want resort and multifaceted development."

Representatives with the Seattle office of Colliers International and Honolulu firm Colliers Monroe Friedlander, which are marketing the property for Metropolitan Mortgage, said a flurry of inquiries from as far away as New York began before marketing materials were released.

"This is pristine oceanfront property," said Scott Mitchell, executive vice president with Colliers Monroe Friedlander.

The parcels, which the seller is offering for between $1.1 million and $19 million each, or about $55 million in total, does not include 2,600 acres of Dillingham Ranch land mauka of Farrington Highway.

'Uncertain' future

Plans for the mauka property — which is owned by Metropolitan Mortgage affiliate Western United Life Assurance Co. and includes an equestrian center, the Dillingham estate home, a coconut grove, a horse boarding facility and a 400-head cattle operation — remain "uncertain," according to Colliers.

Metropolitan Mortgage, which developed Lawai Beach Resort on Kaua'i, said in its 2002 annual report that it expected to rezone the mauka ranch lands around a common theme "such as a private club or an equestrian based community."

Metropolitan Mortgage, which filed for Chapter 11 bankruptcy in February following disclosure of alleged accounting misstatements, has not filed a more recent annual report. Subsidiary Western United was seized by Washington insurance regulators in March.

A Metropolitan Mortgage representative could not be reached for comment yesterday. A local Dillingham Ranch manager said business is continuing as usual.

Complying with zoning

Ken Martyn, a local attorney and Mokule'ia resident, said he supports development of the property that's consistent with agriculture and preservation zoning, but nothing more.

"People need to get it through their heads that if you don't want dramatic community opposition you need to develop it consistent with current zoning. There is money to be made developing it consistent with its current zoning."

The Dillingham family has not owned the ranch for the last 25 years. In 1979, it sold the property to Milwaukee-based Northwestern Mutual Life Insurance Co. for $21.5 million.

Northwestern in 1987 sold the ranch to Japanese firm Sankyo Tsusho Co., which paid $15 million but ran into opposition for its resort project and defaulted on loans in the early 1990s.

Following a transaction in 2000, Metropolitan Mortgage purchased the property in July 2002 for $17 million.

The company rejuvenated the ranch and revived polo matches that were ended by Sankyo Tsu-sho, and planned to build two additional fields as part of a plan to draw international events.

Mike Dailey, president of the Hawai'i Polo Club, which leases one of the parcels for sale, said Metropolitan Mortgage's bankruptcy derailed those plans.

Depending on what a new landowner intends, a sale could affect polo matches now in their second season, though Dailey said nearly 80 percent of the field is in a floodway and cannot be built on.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.

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