Ritz-Carlton, Kapalua heads to auction

Lenders foreclose on luxury resort

March 26, 2011 – By HARRY EAGAR, Staff Writer
Article from: The Maui News

Lenders have foreclosed on the Ritz-Carlton, Kapalua resort, with the luxury property scheduled to be sold at foreclosure auction in Wailuku on May 5.

Securities filings by minority owner Maui Land & Pineapple Co. have revealed for more than two years that the property was in default on a loan that totaled as much as $300 million with accrued interest. But the owners previously had said little except that they hoped to renegotiate the debt.

Lehman Brothers Holdings Inc. and SASCO 2008-C2 foreclosed March 17.

Documents presented to 2nd Circuit Judge Shackley Raffetto showed that in March 2007, very close to the last moments before the sickness that was soon to engulf Wall Street began to show its symptoms, W2005 Kapalua/Gengate Hotel Realty borrowed $232 million against the property.

The money was used for a complete renovation of the hotel – one of Maui’s newest big resorts – which was closed for most of 2007.

The overhaul included converting one wing of rooms to condominiums, and nearly three dozen of those were sold, with the amount of the principal reduced proportionately by those sales.

Meanwhile, much drama was occurring nearby. Lehman Brothers went bankrupt in 2008, and that threatened the financing for construction of the Residences at Kapalua Bay. Maui Land & Pineapple, which had participated in the Ritz loans by providing the land for the hotel, was a partner in the Residences, and lost hundreds of millions of dollars on the project. At the same time, it was being dragged down by the failure of its money-losing pineapple operations.

ML&P’s financial filings with the Securities and Exchange Commission provided limited insight into the woes of the Ritz. Default was entered in April 2009.

The loan was scheduled to have matured in February 2009, but owner W2005 Kapalua/Gengate exercised an option to extend the loan for one year.

As of Nov. 10, the amount owed was $268 million.

Earlier this month, Raffetto appointed Christopher Lau commissioner for the foreclosure sale. Lau was also the commissioner in the record-setting foreclosure auction of Makena Resort last year.

Lau has scheduled the sale for 11 a.m. May 5 at the Wailuku courthouse.

Since the ownership of the giant hotel has been broken up, the sale is for guest rooms that have not already sold as condos, along with other areas including the spa, and common areas – for a total of 262 guest rooms, 34 executive suites and one regular suite, 73 residential suites, the restaurants and lounges, pools, the fitness center, tennis courts and 48 acres of oceanfront land.

The property also comes with the status of a AAA Five-Diamond resort, since despite all its financial troubles, the luxurious hotel has continued to maintain its reputation as a tourist destination.

There will be showings to prospective buyers from 1 to 4:30 p.m. April 21 and 28, through Lau. The hotel management is not involved and should not be contacted with questions about the sale.

For information, contact Christopher Lau, commissioner, 220 S. King St., Suite 960, Honolulu 96813; or (808) 291-3511; or claukapalua@aol.com.

Lau said Friday that he will shortly have an information package available for bidders.

The lender can bid its interest, and any bidder will be required to pay 10 percent down.

As provided for in state law, the foreclosure auction cannot be forestalled by the borrower’s paying off the loan. But the winning bidder on the courthouse steps will have to have its bid confirmed by the court. At that time, any new bidders can reopen the auction by topping the May 5 top number by 5 percent.

Maui County Agricultural Festival on the way

March 24, 2011
Article from: The Maui News

WAIKAPU – Maui farmers, chefs and locavores will gather next month to celebrate island agriculture at the fourth annual Maui County Agricultural Festival.

The event – which includes keiki activities, food booths, animal and farm exhibits and cooking demonstrations – highlights local farms and produce in an effort to raise awareness about the importance of agriculture on Maui. This year’s festival will feature the “cole” family of vegetables, including cabbages, kale and broccoli, which make up a key crop for local farmers.

The festival will take place from 9 a.m. to 4 p.m. April 2 on the luau grounds of the Maui Tropical Plantation. The Maui County Farm Bureau and the county Office of Economic Development organize the event, which is expected to draw more than 5,000 people, according to a release.

Farm Bureau Executive Director Warren Watanabe said cabbages and other coles are “often overlooked” by local consumers but are an essential crop for Maui farmers.

“Head cabbage in particular thrives on the cool volcanic slopes of Kula,” farmer Ralph Inouye said. “Because it’s a fairly stable and transportable plant, it’s a key crop in Maui’s agricultural viability.”

Cabbage also is an excellent source of vitamins and fiber, a release said. Coles will be featured in the festival’s “Taste Education” segment, which will include cooking demonstrations by local chefs and a tasting of the dishes they prepare. Tickets for “Taste Education” are $25 for adults or $15 for children under 12; tickets will be $30 for adults or $20 for children if purchased after Wednesday.

Home cooks also can compete in contests for banana bread and pickled vegetable recipes.

Other highlights of the festival include:

* A “Victory Farm” display of local crops.

* Farm animal exhibit by Maui Cattle Co.

* “Grown on Maui” farmers market.

* Food booths.

* Keiki activities.

* Healthy cooking demonstrations by Down to Earth, Susan Campbell and kumu hula Kapono’ai Molitau.

* A “Farm Doctor” booth with agricultural experts providing advice to gardeners.

* Storytelling.

* Bookstore.

For more information on the event or the recipe contests, or to order tickets for “Taste Education,” visit http://www.mauicountyfarmbureau.org.

Wind farm idea draws praise

Doubts linger on logistics of Upcountry construction

March 23, 2011 – By HARRY EAGAR, Staff Writer
Article from: The Maui News

WAILUKU – Maui planning commissioners Tuesday praised a proposed wind farm as a “wonderful, wonderful project” but raised doubts about getting the massive equipment to the remote location on the southwest flank of Haleakala between two sections of the Auwahi native plant restoration area.

The commission was commenting on a draft environmental impact statement for Sempra Energy’s proposed wind project at Ulupalakua.

Worries about losing the last highway ocean views to what Chairman Jonathan Starr called “pole land” also came up Tuesday. But the wind farm itself was warmly received, with Starr wishing only that it could be bigger than the 21 megawatts proposed.

Pardee Erdman, of Ulupalakua Ranch, which will lease nearly 1,500 acres to Sempra, called the project “a win-win for the ranch.” He said the infrastructure needed to transport heavy turbines and lengthy vanes will “make that land more productive than it is today,” although he added, “We are going to continue raising cattle.”

Maui Electric Co. has contracted to begin purchasing wind electricity from the project a year from now.

But developers still have to obtain many permits before they can proceed, including a special management area permit for parts of the project makai of the road to Kahikinui.

That troubled Commissioner Kent Hiranaga, as well as Starr. As proposed now, the 23,000-volt transmission line would run along the highway through Ulupalakua for a distance makai before crossing mauka. The poles would be 60 feet tall and wooden, but Starr wondered whether the line couldn’t be buried, at least for the portion makai, which he described as some of the finest scenic views in the islands.

Hiranaga wondered whether the mitigative measure shouldn’t be moving the farm itself mauka.

Mitch Dmohowski, Sempra’s project manager, said the developers looked at two potential areas, but ultimately chose the makai site because it had better conditions.

“It’s the best wind site I’ve ever seen,” he said.

Hiranaga suggested that by adding a few more towers, the project could generate the same amount of electricity at the mauka site.

“You have to satisfy us that the loss of the view plane is justified,” he said.

Preliminary estimates call for between eight and 15 wind towers, depending on the size of the turbines installed.

Judith and Richard Michaels, residents of Makena Surf, questioned the developers’ plans for access to the site.

The more direct route would appear to be via Kula Highway, but the developers prefer a more circuitous route down Piilani Highway, along Wailea and Makena alanuis and up a private ranch road, which will have to be considerably improved.

Along the way, medians on the alanuis would have to be torn up, trees cut back and several traffic signals at intersections temporarily removed.

The Michaelses pointed out that, toward the end of that trip, the pavement narrows to a two-lane rural road that, south of the Fairmont Kea Lani hotel, is the only way out. If there were a mishap with one of the 116 “superloads,” Judith Michaels said, “we could not get out.”

An extension of Piilani Highway higher up might prove more practical, they said, particularly if the developer of Honua’ula were persuaded to participate in the improvements in order to get a construction access road to its 670 acres.

There is another ranch road from that area that approaches the wind farm site, but Erdman cautioned that the engineering to make that path usable would be formidable.

In any case, commissioners asked that the study investigate alternatives.

Other areas that commissioners wanted expanded on in the nearly 400-page report included effects on native dryland vegetation and birds, benefits to people living in Kaupo and Kahikinui, demand for water, and who will be responsible for removing the equipment, towers and associated substations at the end of the farm’s useful life.

Dmohowski said the equipment is expected to be good for 25 years, but depending on conditions at that time, Sempra might want to rebuild it rather than abandon it.

Copies of the draft EIS can be found on the website of The Environmental Notice of the Hawaii Office of Environmental Quality Control. Visit hawaii.gov/health/environmental/oeqc/index.html.

Send comments to the applicant, Auwahi Energy LLC, 101 Ash St., HQ 14, San Diego, Calif., 92101, attention, Mitch Dmohowski; to the accepting authority, County of Maui, Planning Commission, 250 S. High St., Wailuku 96793, attention Joe Prutch; or the consultant, Tetra Tech EC Inc., 737 Bishop St., Suite 3020, Honolulu 96813, attention Anna Mallon.

The deadline to comment is April 21.

State jobless rate remains at 6.3%

The hospitality and professional sectors gain, while trade and construction cut jobs

By Alan Yonan Jr.
Article from: Star-Advertiser

Hawaii’s unemployment rate held steady at 6.3 percent in February for the third consecutive month as the state’s lackluster economic recovery failed to spur any significant job growth, the state Department of Labor and Industrial Relations reported yesterday.

The jobless rate has inched downward since peaking at 7 percent in mid-2009, when recession-weary businesses were laying off workers to cut costs. Hawaii’s unemployment rate was as low as 2.3 percent in 2006 before the recession hit. Nationally the unemployment rate fell to 8.9 percent in February from 9 percent in January.

The recession officially ended in June 2009, according to the National Bureau of Economic Research.

However, job growth often lags during an economic recovery because businesses that cut payrolls during slow times are reluctant to refill those positions until they are assured that the economic growth is solid.

The University of Hawaii Economic Research Organization is forecasting the state unemployment rate to average 6 percent this year and 5.3 percent in 2012.

The unemployment rate is derived from a telephone survey of Hawaii households conducted by the Bureau of Labor Statistics. A separate BLS survey of businesses showed that the number of nonagricultural jobs in Hawaii was unchanged at 595,700 in February.

The professional and businesses serv­ices sector gained 1,000 jobs, according to the DLIR report. Three other categories — leisure and hospitality, financial activities and other serv­ices — each added 100 jobs.

The trade, transportation and utilities sector lost 800 positions, while job losses in the construction industry totaled 100.

The state unemployment rate is adjusted for seasonal variations, like extra hiring by retailers for the holidays. Rates for individual counties are reported on an unadjusted basis. Honolulu had the lowest jobless rate at 5.2 percent, followed by Maui County at 7.9 percent, Kauai County at 8.5 percent and Hawaii County at 9.4 percent.

Radiation from Japan yet to be detected in Hawaii

The winds on which the fallout is being carried have not dipped low enough

By William Cole
Article from: Star-Advertiser

Radiation from Japan’s worsening nuclear crisis wasn’t detected in Hawaii yesterday, with the U.S. Environmental Protection Agency saying monitors here showed only normal background levels “thousands of times below any conservative level of concern.”

The measurement came as radioactive fallout from Japan’s stricken reactors hit the West Coast as it was carried east on the high-altitude jet stream, and Hawaii residents watched closely for indications of radiation here.

The EPA said it has its “RadNet” network of radiation monitors deployed. The U.S. Department of Energy also has been monitoring. Neither system detected “any radiation levels of concern.”

A monitoring station in Sacramento, Calif., did detect “miniscule quantities” of the radioactive isotope xenon-133, and the origin was determined to be consistent with a release from the Fuku­shima reactors in northern Japan, the two agencies said in a joint release.

The levels were approximately one-millionth of the dose rate that a person normally receives from rocks, bricks, the sun and other radiation background sources, the agencies said.

“These types of readings remain consistent with our expectations since the onset of this tragedy, and are to be expected in coming days,” the statement said.

U.S. Energy Secretary Steven Chu said Wednesday that a partial nuclear meltdown had occurred at Fuku­shima. The severity of the damage and radiation release was upped by Japan to a 5 on a 1-to-7 international scale yesterday, putting it on par with the Three Mile Island accident in 1979. Cher­no­byl ranks as a 7.

The National Weather Service in Hono­lulu said yesterday that the core of the jet stream — high-speed winds that circle the globe from west to east, and generally north of Hawaii — didn’t dip down to Hawaii for the past several days and are not expected to do so in the next several days.

The winds travel at 18,000 to 35,000 feet in altitude and at speeds of more than 200 mph, the weather serv­ice said. The jet stream periodically extends south to Hawaii in the winter, forecaster Derek Wroe said.

“It would be very rare for the typical jet stream that we talk about to dip down this far south as you get out of the wintertime,” Wroe said.

The EPA operates RadNet detectors on Oahu and the Big Island. Its readings are accessible at http://www.epa. gov/cdx.