Big sale in Makena !

This $ 19 850 000 cash sale in Makena shows there are still buyers who believe in Maui real estate, and are willing to pay for it !

This blog has moved

This blog is now located at http://mauirealestatenews.blogspot.com/.
You will be automatically redirected in 30 seconds, or you may click here.

For feed subscribers, please update your feed subscriptions to
http://mauirealestatenews.blogspot.com/feeds/posts/default.

Hawaiian Hale on Maui

I saw this classic Hawaiian Hale (house) being built, and stopped by to take a look. It has a ground floor and a first floor .... I would love to have been one of the early settlers, arriving on Maui to see many Hawaiian Hale !

Makena Resort Auction, 29 April 2010

Lenders Wells Fargo foreclosed on the Makena Resort some time ago when borrowers, Morgan Stanley Real Estate, and Everett Dowling stopped paying on their $ 193 million mortgage. Wells Fargo has roughly $ 183 million left on the loan, but isn't concerned as they are in first lien position and the Makena Resort is worth more than $ 183 million. The ones in trouble are Morgan Stanley and Everett Dowling, as they invested hundreds of millions of dollars, and sit in second position. This means when / if the Makena Resort is sold at auction (29 April), Wells Fargo will be paid first, and remaining proceeds will go to Morgan Stanley and Everett Dowling. Auction estimates range from $ 350 million to $ 425 million ..... which would result in massive losses for the Morgan Stanley / Dowling partnership.

This story from Chris Hamilton at the Maui News.

WAILUKU - The 1,800-acre property formerly known as Makena Resort and the Maui Prince Hotel will be up for public auction April 29 in the lobby of the Wailuku courthouse.

The auction begins at 11 a.m. at 2125 Main St. and is believed to be the largest foreclosure sale in Maui County history.

The transaction is a fee-simple sale, with no minimum bid required, according to the notice of foreclosure that appeared on Page C8 of Wednesday's Maui News.

Last month, 2nd Circuit Judge Shackley Raffetto appointed Honolulu real estate developer and broker Chris Lau to conduct the sale for what is now called the Makena Beach & Golf Resort. Bidders must register with Lau five days prior to the sale, and the winner must be able to provide a 10 percent down payment April 29.

The South Maui property stretches from Haleakala's slopes, across dryland forests and over lava-rock expanses to beaches. The auction comes

after Maui developer Everett Dowling and Morgan Stanley Real Estate defaulted in August on $192.5 million in loans for the original purchase price of $565 million in 2007 from the Japanese firm, Seibu.

Dowling and Morgan Stanley lost their entire investment in the property, which is said to include millions for development planning, design, publicity, archaeological and engineering surveys, land preparation and permit-acquisition work.

On the other side, the lenders are owed an unspecified amount of accrued interest and fees.

Wells Fargo Bank is acting as trustee for the collection debts owed investors holding the resort's commercial mortgage securities. The bank, which managed to come out of mortgage crisis relatively unscathed, is reportedly in the running itself to buy the Makena Beach & Golf Resort.

The buyer will need to have deep pockets and receive the approval of Raffetto, who's been the property's arbiter, landlord and watchdog for months now.

The auction is for the entire property. That includes 36 holes of golf, 18 of which need to be rehabilitated before reopening, a clubhouse, 2,500 square feet of retail space, 5,200 square feet of meeting rooms, three restaurants and bars, a swimming and wading pool and snack bar, seven outdoor areas for weddings and parties, jacuzzis and a lattice work of hiking and mountain-biking trails.

The real prize, aside from shoreline access points such as Makena Landing, is 1,300 acres of vacant land. That's because Makena Beach & Golf resort also has an assortment of lucrative Maui County residential and commercial entitlements for further development, which County Council members approved at the end of 2008 to spur construction jobs that never materialized.

Dowling, who also has said he would like to regain ownership, had planned to build a luxury-home subdivision and spa, among other amenities, and rebuild the 310-room hotel - before the bottom fell out of the economy.

Without enough cash from pre-sales coming in, he lost the capital required to continue with a project estimated to be worth billions when hundreds of homes, time-share units and condominiums were finished after more than a decade of construction. Many county officials have said they are hopeful that once the economy rebounds, Makena Resort, and all the work and contract dollars it would provide to Mauians, will get back on track.

Prince Resorts Hawaii quit as the resort's management in September, after operating the property since the early 1980s. The court-appointed receiver, Miles Furutani, replaced Prince Resorts with the Mainland company, Benchmark Hospitality International, to oversee the hotel, golf course and land until the resort is acquired by a new owner.

General Manager Kelly Lewis has said Benchmark has substantially improved the resort's financial performance.

In the meantime, the management company also has been able to retain dozens of employees.

Maui Mayor looking to raise .... hell ?

Well, the Maui County Mayor is looking to raise .... hell ?

This article from Cris Hamilton at the Maui News.

WAILUKU With $53 million less in the county's anticipated fiscal year 2011 budget revenues compared with last year, Mayor Charmaine Tavares on Monday proposed to increase or "adjust" the real property tax rates for several classifications.

While Tavares may have asked for real property tax increases, assessed home and land values have sunk so deeply in the global recession - even on Maui, where home values skyrocketed for years - it is estimated that the county's largest source of revenue will still be down by eight digits.

In order to maintain and improve Maui County's utilities, Tavares also said it will be necessary to make increases to some utility fees for at least a second year in a row.

Her proposed budget would make what she said she considers to be modest increases to wastewater treatment, water service, garbage pickup and vehicle registration fees.

Maui Bus, the county's increasingly popular public transit system, likely will also see some fare hikes, as well as beginning to charge customers fares for routes that previously were free, she said.

Maui County had managed to survive the recession to this point without raising taxes. Over the past two years, elected officials instead have cut department budgets, imposed hiring freezes and reduced spending on overtime and travel.

"As we all know, the slowdown of the economy has had a serious effect on real estate, causing a reduction in assessed values," Tavares said during a news conference Monday where she handed out her budget proposal. "If tax rates remain at the same level as the current year, it would mean a projected revenue decrease of $30 million to the county."

This would lead to a drastic reduction in services, she said. So, Tavares is asking the County Council to adjust tax rates upward to generate $223 million in real property taxes, which still is actually $10 million less than the $233 million raised during fiscal year 2010.

Property taxes make up 41 percent of the county's $563 million current fiscal year 2010 budget. It is Maui County's largest funding source, with the hotel tax, or transient accommodations tax, a distant second with about $17 million generated this year.

Despite Tavares' proposed property tax increases, Maui County will continue to have the lowest property taxes in the state, she said on Monday.

Here's a breakdown of the proposed real property tax rates over the current fiscal year. The amounts are per $1,000 of net taxable assessed valuation:

* Time share: $14; no change.

* Improved residential: $5.80; plus 95 cents.

* Apartment: $5; plus 45 cents.

* Commercial: $6; plus 25 cents.

* Industrial: $6.50; no change.

* Agricultural: $5; plus 50 cents.

* Conservation: $5; plus 25 cents.

* Hotel & Resort: $8.75; plus 55 cents.

* Unimproved residential: $7.25; plus $1.90.

* Homeowner: $2.50; plus 50 cents.

* Commercial Residential: $6.25; new tax category.

The County Council still needs to work out its version of the budget during meetings over the next couple months. The fiscal year 2011 budget goes into effect July 1.

A few council members in recent weeks have suggested reducing the homeowners property tax exemption as a way to deal with the shortfall. But that was not an option proffered by the mayor on Monday.

The mayor and County Council were able to make it through the last budget cycle without touching real property taxes. But with fixed costs on the rise, such as fuel and health insurance, and maintenance always an imperative, utility rates will have to go up, as they have in past years, county officials said.

Tavares said the departments need the money in order to keep equipment operating safely and to stay in good standing with other government agencies that grant water-quality and other permits.

This is what Tavares proposed on Monday:

* The monthly base charge for wastewater service would increase by $1.50.

* Water rates will go up by $1.75 a month.

* Tipping fees at the landfill for solid waste will go from 2 cents to 3 cents per pound, or $3 per ton.

* Vehicle registration fees would go up 1 percent per pound of vehicle weight.

* Nearly all of the Maui Bus routes will remain $1 per trip. But commuter fares will double to $2 for the runs to and from Upcountry and East, South, Central and West Maui.

* The Wailuku-Kahului loop routes will no longer be free and cost $1.

Tavares said that the bus system is a subsidized program that costs $7 million a year to operate. She said it will continue to grow to match ridership, including a $1 million program this year to finally install much-anticipated bus shelters.

However, Maui Bus expenses break down to actually cost $4 per passenger ride, Tavares said.

"I recognize the value of our bus service to the community and believe that we can continue to support keeping bus fares at a portion of what it costs taxpayers to operate," said Tavares, who has said that expanding the Maui Bus system is one of her top achievements during this, her first term as mayor.

97% financing from Homepath ???

Yes, its true ! Buyers can get upto 97% financing from Homepath (Fannie Mae), with no mortgage insurance, no appraisal, and no condo doc approvals !! Minimum credit score is 660. Why ? How ? you ask ... well this program is only offered on Fannie Mae foreclosures ... and is, of course, funded by Fannie Mae !

Freddie Mac has a very similar program for its foreclosures called Home Step.

Please contact me for a list a Freddie Mac and Fannie Mae foreclosures in your area.

Aloha !

Peter

Maui Land and Pine (ML&P) records a big loss in 2009

Wow ! Maui Land and Pine (ML&P) is at it again .... losing $123.3 million in 2009 !

This article from Harry Eagar at the Maui News.

" A much-shrunken Maui Land & Pineapple Co. finished 2009 losing $123.3 million, equivalent to $15.33 a share.

The year before, it had lost $79.4 million, or $9.98 a share.

With Maui Pineapple Co. gone and the Community Development segment almost at a standstill, in the fourth quarter the company business was mostly Kapalua resort.

The resort had revenue of $6.8 million, down from $8.5 million in the last quarter of 2008, reflecting the decline in the visitor industry. Its operating loss was $4,672,000, down from $6,621,000 the year before.

For the year, Kapalua had revenue of almost $30 million and losses of $16.1 million. Thus the resort accounted for about three-fifths of the company's total operating revenues in 2009 of $50 million, and about 13 percent of losses.

Pineapple had continued at a low level through the end of the year, and it continued to pile up losses. The loss from discontinued operations of $24.7 million accounted for four-fifths of the $30.3 million in losses in the fourth quarter.

Since then, ML&P has sold much of its Maui Pine assets to Haliimaile Pineapple Co., run by former employees, who are attempting to revive pine cultivation, although with a market to be limited almost entirely to the islands.

Of all the losses during the year, pine made up $11 of the $15.33 per share.

Despite the poor results across all sectors, ML&P stock has been riding up along with the broad market. It reached a 12-month low of $2.05 per share in February and rose to $5.23 Tuesday. The fourth-quarter results were released after the New York Stock Exchange closed.

The results released Tuesday were unaudited interim numbers. The final, audited report, with management commentary, is expected to be submitted to the Securities and Exchange Commission by the end of this month.

The 2009 operating results have been adjusted to remove the discontinued Maui Pine operations. Without pine, ML&P in 2009 was about the same size as ML&P in 2008: $50.4 million in revenue.

As of Tuesday, its market capitalization was about $41 million, about one-seventh of what it was before the wheels came off.

The company said its fourth quarter results include charges of $20.9 million related to the sale and lease of Maui Pine assets, employee severance from the approximately 285 layoffs and cancellation of contracts.

The company's failed joint venture into Kapalua Bay Holdings (the Residences at Kapalua) cost it nearly as much as the failure of pineapple. In 2008-09, ML&P took losses of $92.5 million. The project was completed, after a suspenseful search for new lenders after the failure of Lehman Brothers, and it continues to offer units for sale.

The KBH losses contributed to operating losses of $62.6 million last year (and more than $100 million in two years) for Community Development. With little in the way of new product on hand, and not much demand for either resort commercial or resort residential property, the sector had 2009 sales of only $19.9 million, including sales of undeveloped land.

The resort saw fewer visitors (along with the rest of the island and state), lower revenues due to price cutting, fewer rounds of golf and lower income from retail and villa rental operations. After operating the resort itself since developing it three decades ago, late last year ML&P brought in Outrigger to manage it.

That was among the cost-cutting measures that helped reduce the level of operating losses in the fourth quarter."