New Turtle Bay hui pledges park, housing
by Andrew Gomes
Advertiser Staff Writer
A consortium of lenders yesterday assumed ownership of Turtle Bay Resort, resolving a more than two-year foreclosure case against former owner Oaktree Capital Management LLC by lender Credit Suisse.
The out-of-court settlement puts a group of more than 20 investment firms, including hedge funds and mutual funds, in control of the 880-acre resort long ago approved for large-scale expansion that many area residents have fought to block.
Bob Boyle, vice president and regional operations director of Benchmark Hospitality, which manages Turtle Bay, said day-to-day operations aren't expected to change, but the transaction gives the resort a clearer future.
"It just opens up the skies to move forward," he said. "This is a great day for Turtle Bay Resort and all of its employees."
Stanford Carr, a local developer who was overseeing operation of the resort under an agreement between Credit Suisse and Oaktree, will assume a similar role for the lender consortium as asset manager.
Participating in the new ownership group is Credit Suisse, which sued to foreclose on the property in December 2007 after Oaktree defaulted on mortgage liabilities that had grown to about $400 million.
Oaktree retains no ownership stake in Turtle Bay.
The lender group will continue to do business as Kuilima Resort Co., which has been the business entity used by various past owners of Turtle Bay.
Carr said the new ownership group will focus on maintaining existing operations of the 443-room hotel and amenities that include two golf courses and a spa, as well as fulfilling requirements tied to the resort expansion plan such as creating a park at Kawela Bay and developing workforce housing.
Carr also said the new ownership group will communicate better with the community about its plans.
"Whatever we do we will engage the community in the process," he said. "Turtle Bay Resort and the new ownership group are committed to the community of the North Shore."
North Shore resident Gil Riviere, who heads Keep the North Shore Country, one of two community groups fighting development at Turtle Bay, said nothing really has changed other than the entity pursuing expansion of the resort, and that opponents will keep up their fight.
Riviere and other community members are awaiting a decision from the Hawai'i Supreme Court on whether a supplemental environmental impact statement should be required for any resort expansion.
Another group, the Defend Oahu Coalition, has asked the state Land Use Commission to consider whether 236 acres at Turtle Bay should lose its resort land designation because 24 years have passed without the property owner fulfilling conditions of a 1986 land-use change that approved development.
Oaktree dusted off the long-dormant plans in 2005 when it announced that it would move forward with expansion of the resort with up to 3,500 additional hotel and condominium units.
The California-based investment company had looked for a buyer or a development partner for the property since June 2006, but was unsuccessful and got into financial difficulty maintaining the debt on the resort.
Oaktree had owned the resort since 1998 when it partnered with local developer Bill Mills to buy Turtle Bay with a strategy to sell much of the property for a profit.
Oaktree, which had lent Mills $52 million for the acquisition, assumed sole ownership in 2000 after settling a lawsuit against Mills over alleged kickbacks from the seller and a broker.