Great American Hotels & Resorts Inc. said today that if it gets the planning approvals it needs, it will subdivide the property into 44 two-acre lots and sell them for $350,000 each retail or $250,000 each if it sells to wholesale buyers.

Sylvia Cabral, whose Sylvia Cabral Realty has the listing to sell the proposed lots, said the seller was the Goodness family from the East Coast. Great American said it is paying $1 million for the whole tract, divided into six equal payments over five years with no interest.

The heavily discounted price was available because there are problems with the land, Great American said. For one, there is no water on the property, although the company said it has been told a private water system can be developed. There also may be a title problem, Great American said, but the company added that it believes that can be cleared at a cost of less than $250,000.

David Goode, Maui County public works deputy director, said that to develop a subdivision on state-designated agriculture land such as the site in question, the company would need several approvals.

"It's an uphill battle," Goode said. "Planning commission and county council approvals would be needed to get the land use designation changed to county agriculture to permit the subdivision into agricultural lots," he said. A change of zoning to allow a hotel there would not be easy to get, he added.

Realtor Douglas Sodetani, of Maui Realty Inc., said such subdivision proposals are scrutinized very thoroughly by the authorities because of Maui's current water shortage.

Cabral said Great American knows it has some hurdles to overcome and expects it to take a year or so.

The sale of the lots for a total of up to $15 million should result in a capital gain of more than $7 million, said Great American, which plans to develop a resort on the remainder of the property with the profits from the sale of the residential lots.

The land is a mile and a quarter above the Tedeschi Winery and about four miles uphill from La Perouse Bay. It is on both sides of the Kula Highway.

Great American is the majority owner of a Holiday Inn in Ocala, Fla., an the Cheers Hotel and Casino in Reno, Nev., through its majority interest in Casinos Resorts International Inc.

It also owns cottages at Shipyard Plantations on Hilton Head Island, S.C.

Great American said it is also buying a one-bedroom condominium unit near the beach at Kihei for the exclusive use of its shareholders.

The company said it will spend $1.5 million to develop the lots, build the water system and clear the title.