It marks another step – but the most dramatic one – in the rebuilding of Kaanapali's first resort.

Construction is not expected to begin until August, and then only on two low-rise buildings near the ocean. These will contain 20 of the projected 126 villas.

Jack Hunn, the executive vice president for design, construction and development at Royal Lahaina Development Corp., told The Maui News that there have been some adjustments in asking prices to accommodate a somewhat uncertain resort real estate market. However, this is a big step up for the formerly modest Royal Lahaina.

Prices range from $2.5 million to $10.9 million (but only to $8 million-plus in the first phase), depending on the number of bedrooms and view (ocean or golf course). The Villas will be sold in fee simple.

However, Royal Lahaina is not leaving all of its past behind. The same family has owned it from the start, the Hogans, who were a big part of the early development of Hawaii tourism through their Pleasant Hawaiian Holidays tour business (no longer held by the Hogan family).

Some of the same people have been working at the Royal Lahaina for 40 years, and some of the same guests (and now their children) have been coming for nearly that long.

Gary Hogan, president of Hawaii Hotels & Resorts, says he doesn't want the resort to change so much that it would "be unapproachable."

The first phase of the rebuilding has been completed, a $35 million renovation of a 12-story hotel tower. Guests can still get a room there for under $300.

The Villas, however, are reaching for the apex of the Maui visitor industry.

Buyers will have the option of turning their villas over to management for rental income, and Hogan says he is not sure how many are likely to do so.

Not many, if the experience of a similar development at Hualalai is any precedent, only 10 percent to 20 percent.

Of early reservation signers, "a couple" have indicated they intend Royal Lahaina to become their primary residence, but it is expected that few will make it their only one.

"Today's upscale traveler and those interested in residences such as the Villas are not as concerned about the cost as they are in the value they receive for their money," Hogan said.

Royal Lahaina Resort is, except for the one tower, the closest thing to a low-rise resort at Kaanapali and by far the least dense. It has 27 acres and a long stretch of beach, much more land and beach than newer resorts.

The Villas will replace a number of wooden cottages, some of which are in bad shape, with tarps keeping the rain out. Hogan said that the cottages also are full of termites.

Some old-timers are regretful about losing them, but they are 40 years old, "and it's time for them to come down," he said.

The Villas range from two-bedroom, two-and-a-half-bath units of 2,300 square feet (including lanai) to four bedrooms and more than 9,000 square feet.

The showroom does not include a bedroom, but the living room and kitchen sample shows lots of granite, a built-in barbecue on the lanai and a spectacular view toward Molokai and Lanai.

The Villas won't be quite so close to the beach – about a peanut's throw.

Once the showroom's function is wrapped up, much of it will be demolished and the remainder will become an open restaurant on the beach. A unique-for-Maui, Polynesian-peaked-roof dining area will be retained.

Rob Iopa of WCIT Architects, who designed the new resort, was eager to keep the distinctive structure, since it could hardly be reproduced at today's costs.

The question is, did the Hogans wait too long? Prices for beachfront properties have soared, but now problems with mortgages and falling prices on the Mainland have taken the blush off many real estate markets.

Hogan says he doesn't think Maui's situation is that soft yet. Few buyers are expected to need nonincome verification loans, and, in fact, many probably could pay cash.

That, at least, is the expectation.

In any event, by starting with just 20 units, Hogan said, Royal Lahaina will not be too exposed and could afford to wait out a slow period.

In any case, he says, Hogan and his parents and siblings were not designing to maximize income. Zoning, which goes back to a more expansive era, would allow another half-dozen 12-story towers.

Instead, the new resort is going for amenities: a new lobby building, with the ground floor of the tower turning into a spa; villas; underground parking; and new restaurants.

The Hogan Family Foundation, endowed with $120 million, now disburses $6 million a year, and Hogan says his parents, now in their 80s, are enjoying that.

The business started with a tiny travel agency and grew into a large package tour business with seven hotels.

Only two hotels properties are left, here and on the Big Island.

Hogan says they are being treated as "a legacy."

"Change is going to happen, but we are trying to make the changes as palatable as possible," he said.

Maui resorts are going through a mass renovation, which started with the Sheraton Maui Resort, which like the Royal Lahaina opened in 1962.

The Sheraton and The Ritz-Carlton, Kapalua (which reopened Monday) shut down completely. The Kapalua Bay Hotel and Renaissance Wailea Beach Resort were demolished and are being reborn as lower-density residences.

The Maui Marriott Resort & Ocean Club chose to keep operating while being extensively rebuilt as a time share (Maui Ocean Club).

The Royal Lahaina chose a middle course, for several reasons, said Hunn.

First, to keep the staff employed. Second, to generate cash flow by continuing to operate.

It has been somewhat easier to manage, because the grounds are so large, and Hunn, who came to Maui after 26 years of developing ski resorts in Colorado, says things seem to have gone pretty smoothly so far.

The construction that will begin in August will be on the south side of the resort (the showroom is at the north makai corner).

Hogan said: "We are very confident that the right product, developed responsibly and to the highest standards, and located on one of the world's finest beaches will almost sell itself...

"The location is so special."