(Maui News ; Karen Leach; RAM website)

WAILUKU – Wells Fargo Bank, trustee of the mortgage lending trust group that foreclosed on the Makena Resort last year, fended off two additional bidders Tuesday and prevailed – with a $95 million bid – to purchase the 1,800-acre property and the Makena Beach & Golf Resort.

The action occurred in 2nd Circuit Judge Shackley Raffetto’s courtroom, with the judge confirming the sale during the completion of a foreclosure auction that started on the Wailuku courthouse steps in May. Raffetto agreed to reopen bidding to allow two additional bidders to participate.

Miles Furutani, who was the receiver in the foreclosure, said now that the ownership is settled, “a lot of good things are going to happen in the near future.”

The ownership of the property will move from court receivership to a “new owner designated by the bidder,” according to a news release from the lender group. The new owner was not identified.

Furutani said the new owners will be able to command investment capital to expand the resort, which opened as the Maui Prince Hotel in 1986.

Former owners Morgan Stanley and local partners Everett Dowling and Trinity Investments had big plans for Makena before the national real estate market cratered. They paid about $570 million in 2007 to acquire the resort, hotel and golf courses from Seibu Group, which had its own financial problems in Japan. Then they invested at least another $100 million in plans and projects before their investment group failed to keep up the payments on a $192.5 million first mortgage last year.

Among the plans then was to replace the 310-room Maui Prince Hotel. During the receivership, the hotel has been managed by Benchmark as the Makena Beach & Golf Resort.

In May, at a brief auction on the courthouse steps, Wells Fargo, acting as agent for the creditors, bid $55 million, using its credits as tender. Only one other bidder, who did not identify himself, made a bid. By that time, the junior lenders had already been wiped out.

In Hawaii, foreclosure auctions have to be submitted to the court for confirmation. If the property is desirable, that is usually where the real action occurs, and that is what happened Tuesday.

The purchase includes the resort’s golf courses and county authorizations for up to 1,100 residences. The authorizations come along with obligations to build up to 400 units of affordable housing and many other conditions.

During the foreclosure period, which lasted about 10 months, the creditors authorized considerable expenditures to keep the hotel operating and to expand the resort. A Makena Ranch guided horseback ride was one, as well as reopening a restaurant and other improvements.

Furutani said the employees had been magnificent during the period of uncertainty. “The employee family has been the biggest asset,” he said.

Willie Kennison, Maui director of the International Warehouse and Longshore Union, which represents the employees, said the auction sale was a step in the right direction.

“We feel very positive about this outcome,” he said. “We have talked to representatives of new ownership, and we know they are really committed to Makena and to Maui. That is good news for employees and good news for our island guests.”

Furutani said the resort’s hotel occupancy is double what it was a year ago.

“The resort is in better condition, and morale is high since we were able to rehire most of the employees who had been let go when the prior owner went into default on its debts,” he said.

He acknowledged that the economy is still down but predicted that the infusion of capital to remake the resort will “also be for the benefit of Maui County.”

* Harry Eagar can be reached at heagar@mauinews.com.

HONOLULU (AP) – A non-Native Hawaiian student has been admitted to attend Kamehameha Schools this fall.

The schools’ board of trustees and chief executive officer made the announcement in a letter posted on the website of the institution dedicated to educating Hawaiian children.

The unidentified student was among some 45 students invited from a wait list for admission to grades 10 through 12, the letter said.

Kamehameha has a century-old Native Hawaiian-preference admissions policy.

”Non-Hawaiian applicants who meet our admissions criteria can be admitted if vacancies exist after the preference is applied,” the officials said. ”We will continue to offer admissions preference to Hawaiians because it is the most direct way to fulfill our mission of improving the capability and well-being of Hawaiians through education.”

The student follows in the footsteps of Kalani Rosell, a non-Native Hawaiian who graduated from Kamehameha’s Maui campus in 2007. He was admitted in 2002 after a list of Native Hawaiian students had been exhausted.

In 2003, another non-Native Hawaiian student was allowed to attend 7th grade on the school’s Kapalama campus following a lawsuit.

Kamehameha also has a campus on the Big Island. The campus that the newest non-Native student will attend wasn’t named.

Kamehameha Schools was established in 1883 by the will of Princess Bernice Pauahi Bishop to educate Hawaiian children. The largest private landowner in Hawaii, the trust has said that as of November, the value of its investments totaled about $7.7 billion.

Roy Benham, a past president of the Kamehameha Schools Alumni Association, said Friday that the school probably didn’t have a choice under its admissions policy but to accept the non-Native Hawaiian student.

”I think they did the right thing and they didn’t deny admission to any Hawaiian applicants,” he said

Who says housing on Maui is unaffordable? Just snatch this gem before it gets away! A steal at $150,000:

“Tucked in to a valley bottom with no utilities, this place takes you back to nature. The little shed on the property is tiny with a sleeping platform and it keeps you dry. Included is a new 5,000-gallon catchment water tank. This property is extremely private and is surrounded by old taro patches and fronts Honopou Stream.”

That’s creative marketing. Another way to describe the property might be:

“Quarter-acre lot, mostly under water. No electricity, half a bath. Closet-size (128 square feet) shack. Only $50,000 down.”

It is picturesque. A slide show can be found at the Maui Board of Realtors Multiple Listing Service at www.ramaui.com. This listing – not the lowest in price, by the way – is MLS 343234.

A real estate market in distress produces some odd opportunities for the venturesome and flush. Take MLS 342595, which is in Kihei. It’s a five-bedroom, 4-bath, modern home, a bargain at $319,900, considering that the county assessed valuation is $633,500.

However, the sales description is firm: “This bank-owned home is being sold AS IS, SIGHT UNSEEN, without Disclosures and Cash Only.”

It further advises: “Seller may not be able to convey possession at the time of closing.

. . . Consult an attorney regarding your responsibilities as a landlord and research eviction laws in Hawaii.”

MLS listings have always hinted at domestic dramas in the past, and they have become more interesting as disclosure standards have expanded over the years. What disappointment lies behind MLS 339328?

“This property is being sold with a 20 percent completed home. . . . The seller is not finishing the house currently under construction. . . . In the event the buyer chooses to finish the 20 percent complete existing house, it is a two-story large home with four bedrooms, four full bathrooms, two half-baths, with a very large family room and tall, tall ceilings! The house has . . . four-car detached garage.”

Then there is MLS 333331, a ” two-bedroom, two-bath plantation style home, 2750 square feet, built in 2004,” only $65 million. It comes with an extensive yard, called Hana Ranch.

The most expensive offering this week that does not include 1,200 cows is a 1-acre beachfront place at Kaanapali, MLS 332824.

The description, which seems aimed at agents rather than buyers, says: “With over 11,000 square feet of living space, this magnificent beachfront home has stunning ocean and sunset views. The outstanding craftsmanship is visible throughout the two master suites, six guest suites, media room, library, office and separate caretaker’s quarters. The warm sandy beach and azure Pacific are the backyard of this Kaanapali Estate. All of your client’s needs for health and well-being will be met with the oceanfront pool, Jacuzzi, yoga pavilion and exercise room. This extraordinary masterpiece property is the reason your clients have chosen to live on Maui.”

Asking price: $23.8 million.

Maui News: 

Through midyear, Maui residential real estate sales activity has zoomed upward, although prices have not.

In the first six months of 2009, there were 296 single-family closings. This year, 422, an increase of 42.6 percent. In the first six months of 2009, there were 407 condominium closings. This year, 666, a jump of 63.6 percent. Single-family prices edged ahead by 2 percent to an average of $768,866, but condo prices have fallen 11 percent to $756,119.

“I don’t know what’s really driving it, but people might believe we’re at the bottom,” said Bruce Faulkner of Maui HI Realty and president of the Realtors Association of Maui.

Faulkner said he’s not an economist, but he is sure that until the backlog of short sales and bank-owned repossessions is worked off, prices will not really go back up.

The distress sales are dragging down appraisals, and, “we’ve seen some sales killed when the buyers have seen appraisals come in lower than the offer. It’s even happened on Lanai.”

On the other hand, the $8,000 tax credit offered to first-time buyers boosted sales in the first half of the year.

So while the Maui real estate market is nowhere near what it used to be, it’s also nowhere near as bad as it has been.

Total turnover in Multiple Listing Service properties this year so far has reached $828 million. There have been years when that figure was well over a billion, but for the first half of 2009, it was only $569 million.

Prices are still way off their peaks – there was a time when the average price of a single-family house on Maui was a million dollars – which discourages people from trying to sell if they don’t have to, Faulkner said.

“People are not going to go into the market unless they’ve got no choice,” he said.

That makes for a market where clean offerings are scarce. There are still many short offerings, where owners who have not had foreclosure proceedings go to completion are trying to get out from under mortgages that are more than the house is now worth.

These are often complicated by second mortgages, usually held by a different lender than the primary mortgage. Short sales are notoriously hard to do, because the holder of the second mortgage, who ordinarily stands to get nothing, can stop it by refusing to cooperate.

Faulkner said the Realtors association has offered a course on how to manage short sales, hoping to get the local real estate business community all operating on the same page, so deals can get done. More than 100 real estate professionals have already taken the course, which will soon be offered again.

Mortgage rates are so low that Faulkner said he thinks they can hardly get any lower, which has caused him to rethink refinancing.

“In the old days, we used to tell people interest rates had to go down two points to make sense,” he said. With rates so low, now he recommends doing a calculation to see if it makes sense to get a 1 percentage point gain.

Sometimes it will, and he said, adding that “I like to see people get 15-year mortgages.”

That doesn’t reduce the monthly payment so much, but it means that very soon “they’ll be mortgage-free.”

Faulkner said the increase in turnover has been across-the-board for single-family sales in the first half of the year, although especially marked in Wailea and Upcountry.

Looking at percentages, Maui Meadows is the hottest spot, with closings up to 11 from two the year before, although prices have fallen 17 percent to an average of $828,000.

In Wailea-Makena, home sales have doubled to 18, and prices have jumped 22 percent to $4.2 million. That figure is skewed by one high sale, because the median sale – at which half the prices are higher, half lower – has hardly budged at $1.8 million.

In the similar resort residential section of Kaanapali, home sales also have doubled, to 12, and prices have fallen 6 percent to nearly $1.5 million. At Kapalua, sales rose from three to four, and the average price doubled to $4.2 million.

In Makawao, Olinda and Haliimaile, home sales rose to 23 from 13, and prices are up 10 percent to $504,000. In Kula, Ulupalakua and Kanaio, sales are up from 19 to 27, and average prices are up 14 percent to $649,000. In Pukalani, closings rose from 28 to 34 and prices fell 7 percent to $514,000.

The jumpingest place for home sales in East Maui, though, is Haiku, where closings more than doubled to 23 and prices rose 10 percent to $607,000.

The west side remains a much more expensive place to live than the rest of the county. In Lahaina, transactions in single-family houses rose to 24 from 15 and prices gained 8 percent to $947,000.

In Central Maui, there were 132 transactions (up from 113 for the previous year’s first six months), by far the most of any area, and prices fell 17 percent to $426,000. In Kihei, there were 81 closings, up from 53, and prices were down 19 percent to $524,000.

The median price of a single-family house, including Lanai and Molokai, may give a clearer picture of housing costs for ordinary folks, because it eliminates the influence of very high prices for a few mansions. This year, the median price for a single-family house has been $469,000, down almost $35,000 from last year.

The building of so many luxury condominium projects has changed the relationship in average housing prices. A generation ago, condos were Maui’s entry-level housing and sales were concentrated in Kihei.

Today, some of the most expensive housing in the county are the condos on Lanai (although the single transaction there this year was for only $480,000), and there was almost as much activity in Kaanapali (184 closings, up from 157) as in Kihei (203, up from 100). In Kihei, average prices fell 15 percent to $341,000.

The condo in Kihei is still Maui’s version of affordable housing, less than half the average price of a single-family home.

But the average condo is anything but affordable and at $756,000 is within $12,000 of the single-family average.

Top-end condos are moving like hot cakes, although prices are not so hot. At Kapalua, condo closings jumped from three to 14, at average prices of $1.6 million, up from only $1 million a year ago.

At Kaanapali, closings increased by 27 from 157 to 184. although prices were unchanged at $1.3 million. In Wailea-Makena, closings more than doubled to 64 and prices advanced 4 percent to $1.7 million.

The median price of a condo tumbled 32 percent to $428,000, with much of that attributable to an unusually skewed mixture of sales in Wailea-Makena.

* Harry Eagar can be reached at heagar@mauinews.com.