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Date Posted: 13:56:21 05/25/08 Sun
Author: Endangered Specie
Subject:

PARADISE PAVED

May 24, 2008

TURTLE BAY UNDER NEW MANAGEMENT

By Rick Daysog, Honolulu Advertiser

Local developer Stanford Carr has taken over management of the Turtle Bay Resort and the controversial plan to build five new hotels with 3,500 rooms and condominium units on O'ahu's North Shore.

Carr replaces Los Angeles-based Oaktree Capital Management LLC as Kuilima Resort Co.'s interim manager.

He also will be in charge of securing new investors for the 848-acre property, whose redevelopment has sparked opposition from community groups and has prompted Gov. Linda Lingle to seek a state buyout to preserve the land.

"There's a lot of work to be done on the property and there's a lot of work to be done in communicating with the community," Carr said in a telephone interview yesterday.

Carr's appointment is part of an agreement by lenders Credit Suisse and Wells Fargo & Co. and Kuilima to restructure the development company's $400 million loan, which had been the subject of a foreclosure suit.

Under the terms of the restructuring, Oaktree exits from day-to-day management of Kuilima but retains ownership of a 470-acre agricultural property just mauka of the resort.

The 470-acre property does not include the site of the controversial redevelopment plan.

Nicola Jones, who is stepping down as Kuilima's chief executive officer, said in a news release that the resort and its golf courses will operate as usual and that the restructured loan will make it easier to attract new investors.

"We're very pleased that a settlement has been reached, as this now reopens the door to a wide range of prospective investors," said Jones.

Carr is owner of Stanford Carr Development LLC, one of the largest residential developers in the state.

He also is a longtime Lingle supporter and was part of a local team that invested in Aloha Airlines before it shut down two months ago.

Last year, the Lingle administration awarded an $11.5 million nonbid emergency contract to begin building transitional housing in Ma'ili to a company owned by Carr.

Rev. Bob Nakata, co-chair of the Defend O'ahu Coalition, which opposed the Turtle Bay expansion plan, said Carr's links to the Lingle administration may mean that he's "more susceptible to public pressure."

"He doesn't want a public relations disaster, because he has other business interests in town," said Nakata.

Oaktree, a $54 billion private investment firm, acquired Turtle Bay in 2000 and recently revived plans for a multibillion-dollar development that would include five new hotels and 3,500 hotel rooms and condos.

But the plan immediately ran into opposition from community leaders who want to retain the North Shore's rural way of life.

In December, Credit Suisse filed a foreclosure suit against the company after it defaulted on a $285 million loan.

Earlier this year, state lawmakers passed a Lingle-backed plan, in which the state would seek to acquire the undeveloped portions of the resort. Under the plan, the state would buy areas surrounding nearby Kawela Bay and Kahuku Point while a private investor would take over the hotel, the golf courses and other developed areas.

Ted Liu, director of the state Department of Business, Economic Development and Tourism, welcomed the management change, saying it adds clarity to the sales process. Neither Credit Suisse nor Wells Fargo has a local presence, making it difficult to negotiate a deal with all parties, said Liu.

"This presumably creates the type of certainty that makes it better for investors and buyers," said Liu.

Also, check out:

http://www.kycbs.net/Developers.htm
http://www.kycbs.net/Punaluu.htm
http://www.kycbs.net/Oaktree.htm

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Replies:

Re: PARADISE PAVED -- Bobby N. Harmon, 14:29:10 05/25/08 Sun