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The Honolulu Advertiser
Posted on: Thursday, January 8, 2009

State still wants to acquire Turtle Bay

By Derrick DePledge
Advertiser Government Writer

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Gov. Linda Lingle says her administration is still willing to negotiate a deal to buy scenic Turtle Bay Resort on the North Shore.

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The Lingle administration has made two unsuccessful offers to buy Turtle Bay Resort but remains willing to negotiate with brokers representing the scenic North Shore property.

The state has sought to acquire the resort land and sell off the hotel, golf courses and other businesses while preserving open space from Kahuku Point to Kawela Bay.

Gov. Linda Lingle made the suggestion during her State of the State speech last year and the Legislature authorized the state to work toward a purchase. But the issue has largely dropped to the background as the state deals with the economic recession.

Linda Smith, Lingle's senior policy adviser, said the administration made the offers public yesterday to update the state's Turtle Bay advisory group and to reaffirm the administration's support for the idea.

"Our commitment is still to try and acquire the property, to preserve a significant portion, and to minimize any taxpayer investment by working with those who are interested in acquiring the hotel, the golf courses, and the land underneath the condominiums," Smith said.

The administration made an offer in August that was later rejected. A second state offer in November, which came at a lower price because of the decline in the real-estate market, expired in December after Turtle Bay brokers and lenders did not respond.

The administration would not disclose the terms of the offers, but Smith said they were consistent with the state's goals of minimizing exposure to taxpayers. She also said the state Department of Land and Natural Resources has prepared an application to the state's Legacy Land Conservation Program to potentially help with a state acquisition.

Smith said the state did not consider the rejected offers as an indication the idea is dead.

"I don't think we should read it as a sign," she said.

Ted Liu, director of the state Department of Business, Economic Development and Tourism, said the state believes it continues to be a qualified and 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," Liu said in a statement.

Stanford Carr, a local developer who is managing the resort for creditors, is moving ahead with plans to build new hotels and condominium units at the resort — projects which have been opposed by some preservationists. Carr was appointed in May as part of an agreement between lenders and the resort's developer to restructure a $400 million loan that had been the subject of a foreclosure lawsuit.

Although preservationists and many state lawmakers have spoken enthusiastically about Lingle's proposal, there have been doubts within the North Shore community and the Legislature about whether the governor was sincere and whether a state purchase was practical.

Gil Riviere, president of Keep the North Shore Country, said it was encouraging that the state made the offers. He said it was important to update the status of negotiations because some people mistakenly believe the state had already purchased the resort.

"It's all going to depend on whether or not the creditors are willing to let it happen," he said.

Riviere said people should also be aware the resort expansion is moving forward. Last year, the city granted a third six-month extension on the developer's application to subdivide land at the resort. Keep the North Shore Country has sued to force a supplemental environmental impact statement on the expansion and the case is with the state Intermediate Court of Appeals.

"They're still trying to push it forward," he said.

Reach Derrick DePledge at ddepledge@honoluluadvertiser.com.