Mākena resort sells at auction for $55M
A group of lenders led by Wells Fargo Bank submitted the high bid of $55 million at a foreclosure auction yesterday for the Makena Beach and Golf Resort.
The Makena Beach and Golf Resort, formerly known as the Maui Prince Hotel, is a 310-room hotel on 1,800 acres located on a secluded beach on the southwestern Maui coast.
Wells Fargo and the group of lenders were owed more than $192.5 million by the hotel's owners.
Real estate developer and broker Christopher Lau, the commissioner appointed by the court, conducted the auction and the sale now moves to a confirmation hearing before 2nd Circuit Court Judge Shackley F. Raffetto.
"There was a huge amount of interest in the property," Lau said. "I spent hundreds of hours these past few months introducing potential investors from all over the world to the property.
"In the end, though, the economy remains uncertain and in this environment no one was prepared to bid anything close to what the mortgage lender is owed."
There was only one other bidder, who bid $50 million.
"Makena is a special place, and we are committed to a smooth transition to stable new ownership," said Barry Sullivan, attorney for the mortgage lender. The resort has remained open during the foreclosure proceedings.
The Makena Resort has improved its performance since a court-appointed receiver was installed and Benchmark Hospitality International took over operations in September despite the soft hotel market over the past year, said Kelly Lewis, the resort general manager.
New activities that have been introduced include "Makena Vista," an outdoor event space; horseback riding at "Makena Ranch"; and updated restaurants, including "Zen-Zen."
"Every month, we see continued improvement and more activity at the resort," Lewis said. "Our occupancy has nearly doubled from a year ago, and we are looking forward to a very strong summer season. Our group and individual business has shown strength across the board. The resort is open for business, will stay open for business, and we look forward to welcoming kama-'āina and guests from around the world to this truly special place."
Willie Kennison, Maui director for the ILWU that represents the majority of employees at the resort, was not surprised that the lender was the prevailing bidder.
"They reached out to us from the start of this entire process, and we appreciate that they are committed to Makena just as we are," he said.
It was owned by a joint venture between affiliates of Everett Dowling and a Morgan Stanley real estate fund that did not pay the mortgage. The mortgage lender began foreclosure in August.
Since September, a court-appointed receiver, Miles Furutani, has had oversight of the property and has hired Benchmark Hospitality International as the operator.
A date has not yet been set for the court confirmation hearing but is expected within the next 45 days.