Mitsui Trust foreclosing
By Rick Daysog
on Maui Marriott
Star-BulletinA Japan-based lender has filed a foreclosure suit against the owner of the 720-room Maui Marriott Resort, which is now scheduled to go on the auction block. Mitsui Trust & Banking Co. filed the complaint last week against Azabu Building Co. in Circuit Court on Maui, saying the developer owed $245 million in principal and interest for the 15-acre, ocean-front hotel in Kaanapali.
Joseph Toy, head of hospitality consulting services at Coopers & Lybrand L.L.P., said the auction will generate considerable interest. "It's located in one of the most popular destinations in Hawaii," Toy said. "Being a beachfront property in Kaanapali is just really a substantial plus."
No date has been set for the auction. Tom Hayes has been named foreclosure commissioner.
A spokesman for Marriott International, which manages the hotel, said the foreclosure will not affect the day-to-day operations.
Azabu acquired the Maui Marriott, which opened in 1982, from Metropolitan Life Insurance Co., Marriott Corp. and KBP Limited Partnership in 1986.
The suit is the latest legal action faced by Azabu, headed by Japanese deal maker Kitaro Watanabe, who invested about $600 million in isle properties during the late 1980s and early 1990s.
In 1993, Mitsui filed a foreclosure suit against Azabu for its purchase of the 1,200-room Hyatt Regency Waikiki. The suit has since been settled and the Maui Marriott foreclosure suit won't impact the Hyatt Regency or the Ala Moana Hotel, which also is owned by Azabu, a spokesman said.
Watanabe is under scrutiny in Japan. This summer, Tokyo officials arrested Watanabe and two other officials, alleging that they illegally concealed company assets from creditors. The arrests had no bearing on Azabu's Hawaii units, a spokesman said then.
Some believe that the foreclosure is largely a result of Azabu's prolems in Japan. In 1994, Mitsui wrote off about $1 billion in bad debts largely from Azabu's loans in Japan.
The Associated Press contributed to this report.
