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The Former Maui Prince Hotel Scheduled for Public Foreclosure Auction
 in April, 2010; Resort Previously Acquired in 2007 for $575 million

By Andrew Gomes, The Honolulu AdvertiserMcClatchy-Tribune Regional News

February 9, 2010 --The former Maui Prince Hotel, now known as the Makena Beach and Golf Resort, will be offered for sale with its two golf courses and undeveloped land at a public foreclosure auction in April.

A Maui circuit judge recently authorized the auction in a foreclosure case initiated in August by lenders holding a $192.5 million mortgage on the luxury hotel and surrounding property.

A date for the auction has yet to be set, but it will be handled by local real estate developer and broker Chris Lau, who was named foreclosure commissioner in the case.

After the auction, there will be one more chance at a court confirmation hearing to outbid the auction's highest bidder.

Often during foreclosure auctions, the mortgage holder can prevent anyone from acquiring the property for less than the amount owed on the mortgage by making a credit bid up to what is owed.

A venture including Maui development firm Everett Dowling Co. and a Morgan Stanley real estate fund bought the 310-room Maui Prince, two golf courses and 1,300 acres of undeveloped land in 2007 for $575 million from Japan-based Seibu Group with plans to reposition the property.

The buyer financed the purchase with the mortgage plus $200 million in equity and $227 million from other investors that received no security in the property. Wells Fargo is the trustee for the mortgage debt held by a group of lenders.

Lau in a statement said the hotel and golf course are expected to operate normally during the sale process.

The resort yesterday began marketing a Pride Romance Package geared toward the gay and lesbian community, for $95 per person per night, double occupancy, including breakfast for two.

The property is being managed by Benchmark Hospitality International, which in September replaced Prince Resorts Hawaii at the request of Wells Fargo. A court-appointed receiver, attorney Miles Furutani, will continue overseeing operations until a purchase is completed.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.

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