Maui Circuit Court Judge Shackley Raffetto has entered an order of foreclosure and appointed Honolulu real estate developer and broker Chris Lau as commissioner to sell the Makena Beach and Golf Resort to satisfy the unpaid mortgage debt on the property. The property is expected to be sold at public auction in April 2010 to pay the current mortgage debt of in excess of $192.5 million. The resort, formerly known as the Maui Prince Hotel, is located on the slopes of Haleakala including substantial property adjacent to a secluded beach on the southwestern Maui coast.
While ownership of the property will change hands, no one expects any changes for employees, visitors and guests. "My job, ordered by the court, is to transition ownership since the current owners could not pay the mortgagel," said Lau. "I expect the resort to operate 'business as usual' throughout this process."
The hotel has been managed by Benchmark Hospitality International since September 17, 2009 with oversight by attorney Miles Furutani, the court appointed receiver. After the auction is held, confirmation by the court and closing on an asset of this size typically takes another three to four months.
The resort has been owned since July of 2007 by a joint venture between affiliates of Everett Dowling and a Morgan Stanley real estate fund. That venture borrowed $192.5 million of mortgage debt and an additional $227 million of debt that was not secured by the mortgage. Wells Fargo, as trustee for the mortgage debt, initiated foreclosure in August of 2009 after the venture defaulted on its mortgage and other debt obligations. To oversee resort operations and transition to new management, court-appointed receiver Miles Furutani will remain in possession of the resort until closing with the new owner.
