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Deadline is extended for Turtle Bay sale

Lenders extend deadline on offers for Turtle Bay

STORY SUMMARY | READ THE FULL STORY

Turtle Bay Resort lenders have extended the deadline to sell the embattled resort after failing to secure a buyer by Tuesday.


The 858-acre resort was seeking to attract a buyer by the end of last month, the deadline stipulated by lenders, including Credit Suisse Group and Wells Fargo & Co., as part of a foreclosure settlement with owner Oaktree Capital Management L.P. Lenders haven't immediately set a new sales deadline.


However, Oaktree could lose the unspoiled resort - one of Oahu's last undeveloped coastlines - if a buyer is not found by year's end, according to Stanford Carr, the resort's interim manager who was selected in May by lenders to sell the property.


That prospect would make a state acquisition of the resort more difficult, particularly in a down economy.

— Kristen Consillio



FULL STORY >>

By Kristen Consillio

POSTED: 01:30 a.m. HST, Oct 02, 2008

Amid the upheaval in the financial markets, lenders of Turtle Bay Resort have extended a deadline to find a buyer before taking control of the controversial property on Oahu's North Shore.

The 858-acre resort failed to attract a buyer by the initial Tuesday deadline stipulated by lenders, including Credit Suisse Group and Wells Fargo & Co., as part of a foreclosure settlement with owner Oaktree Capital Management L.P. Lenders haven't immediately set a new sales deadline.

However, Oaktree could lose the unspoiled resort - one of Oahu's last undeveloped coastlines - if a buyer is not found by year's end, according to Stanford Carr, the resort's interim manager who was selected in May by lenders to sell the property.

That prospect would make a state acquisition of the resort more difficult, particularly in a down economy.

"There's no liquidity in the marketplace now; capital is chasing distressed assets," Carr said. "Due to the turmoil in the financial markets, everybody wants to wait to see what happens. I don't think the state is in a position to use taxpayers dollars when we've got our own problems already. And it's only going to get worse."

Meanwhile, the resort has received another six-month extension to meet city requirements for subdivision approval - a move that would allow it to be sold off piece by piece. Construction has begun on Kuilima Drive and Opana Well improvements, both required for city approval.

A sale by the end of the year is unlikely in the current economic climate, particularly a deal with the state's involvement, according to sources familiar with the situation. Gov. Linda Lingle originally had hoped the state could acquire the pristine resort and sell the hotel to an operator while preserving the remaining vacant land from development.

"The state is not going to acquire the property - period," said Bill Paty, chairman of the governor's Turtle Bay Advisory Working Group. "It is not interested in acquiring the property. That takes money and the state doesn't have any money and we don't expect a great deal of monetary support given the economic times."

Instead, the state is seeking to facilitate the purchase of the property to a buyer that would preserve a majority of the rural land, he said.

Controversy over Turtle Bay flared in 2006 when Oaktree subsidiary Kuilima Resort Co. announced plans to build an additional 3,500 hotel and condominium units on the property. Credit Suisse filed a $283 million foreclosure lawsuit last December against Kuilima, which under the foreclosure settlement, still owns the property.

Amid the upheaval in the financial markets, lenders of Turtle Bay Resort have extended a deadline to find a buyer before taking control of the controversial property on Oahu's North Shore.

The 858-acre resort failed to attract a buyer by the initial Tuesday deadline stipulated by lenders, including Credit Suisse Group and Wells Fargo & Co., as part of a foreclosure settlement with owner Oaktree Capital Management L.P. Lenders haven't immediately set a new sales deadline.

However, Oaktree could lose the unspoiled resort - one of Oahu's last undeveloped coastlines - if a buyer is not found by year's end, according to Stanford Carr, the resort's interim manager who was selected in May by lenders to sell the property.

That prospect would make a state acquisition of the resort more difficult, particularly in a down economy.

"There's no liquidity in the marketplace now; capital is chasing distressed assets," Carr said. "Due to the turmoil in the financial markets, everybody wants to wait to see what happens. I don't think the state is in a position to use taxpayers dollars when we've got our own problems already. And it's only going to get worse."

Meanwhile, the resort has received another six-month extension to meet city requirements for subdivision approval - a move that would allow it to be sold off piece by piece. Construction has begun on Kuilima Drive and Opana Well improvements, both required for city approval.

A sale by the end of the year is unlikely in the current economic climate, particularly a deal with the state's involvement, according to sources familiar with the situation. Gov. Linda Lingle originally had hoped the state could acquire the pristine resort and sell the hotel to an operator while preserving the remaining vacant land from development.

"The state is not going to acquire the property - period," said Bill Paty, chairman of the governor's Turtle Bay Advisory Working Group. "It is not interested in acquiring the property. That takes money and the state doesn't have any money and we don't expect a great deal of monetary support given the economic times."

Instead, the state is seeking to facilitate the purchase of the property to a buyer that would preserve a majority of the rural land, he said.

Controversy over Turtle Bay flared in 2006 when Oaktree subsidiary Kuilima Resort Co. announced plans to build an additional 3,500 hotel and condominium units on the property. Credit Suisse filed a $283 million foreclosure lawsuit last December against Kuilima, which under the foreclosure settlement, still owns the property.


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