Mitsui Trust & Bank says day-to-day operations
at the Marketplace are not affected.
Photo by Dennis Oda, Star-Bulletin

In the lawsuit, Mitsui says the developer, Aloha Tower Associates, has made no attempt to pay back a $60 million loan from September 1993 or any interest payments. Mitsui asked the court to appoint a receiver to gather all rent and other income from marketplace tenants on Mitsui's behalf and to appoint a commissioner to sell the marketplace.

U.J. "Rick" Rainalter Jr., a partner with Aloha Tower Associates, said Tuesday that the development partnership would have no comment on the lawsuit, which was filed late Monday in state Circuit Court.

"I can't comment on it because we have pending litigation against Mitsui and our attorneys have advised us not to comment," he said.

Jim Boersema, a Mitsui spokesman, said: "The filing of the action was necessary to preserve Mitsui Trust's mortgage rights under the lease with Aloha Tower Development Corp. for the project."

Ronald Hirano, executive director of the Aloha Tower Development Corp., the state agency that oversees the waterfront development plan, said he had not seen the lawsuit and would not comment on it.

Mitsui said that agreements among the lender, the developer and the state agency do not require the bank to make good on the developer's overdue debt to the state agency.

If the state agency cancels Aloha Tower Associates' lease for any reason, Mitsui has the right to seek a new lease for itself, or a party it designates, within 30 days, Boersema said.

The state is involved because Aloha Tower Associates failed to meet a May 31 deadline to pay $1.5 million to compensate for waterfront revenue lost while the state land was being developed.

The developer said at the time that it had the money lined up but needed Mitsui's cooperation and that was not forthcoming. In May, Aloha Tower Associates sued Mitsui, claiming that the bank had provided less than $100 million, just to develop the shopping center, out of a promised $710 million for apartment and commercial development over a considerably larger waterfront area.

The development was conceived in the late 1980s to include the marketplace, condominiums, offices and a hotel. However, the economy soured and development ended with the marketplace, which opened in November 1994.

The state in mid-May gave the developer and Mitsui until mid-July to resolve their differences and come up with money owed.

In the background, both Mitsui and Aloha Tower Associates have said they were negotiating to have other parties take over the marketplace loan but as of yesterday nothing had been finalized.

The financial disagreement covers only the marketplace at Piers 8 through 11. Aloha Tower Associates retains the development rights for Piers 8 through 14.

Day-to-day operations of the marketplace will not be affected by the lawsuit, Mitsui said.