The new owners alsoBy Russ Lynch
purchase the adjoining
Ko Olina Golf Course
The developers of the Ko Olina Resort & Marina said today that they have formed a partnership with an arm of Massachusetts Mutual Life Insurance to buy the 387-room Ihilani Resort & Spa hotel from a subsidiary of Japan Airlines Inc.
In a separate deal, the Ko Olina partners also will buy JAL's adjacent Ko Olina Golf Club.
Prices were not disclosed but Bloomberg News quoted Japanese sources as saying JAL will get $93 million for the hotel and golf course.
Ko Olina partners plan to bring in Marriott International Inc. to manage the operations.
The partners had earlier disclosed that Bethesda, Md.-based Marriott plans to spend more than $250 million to develop a 750-unit time-share property on the Ko Olina waterfront, giving it a major presence on Oahu.
Ko Olina Co. LLC, a Hawaii-incorporated partnership that includes local and mainland investors, said it will join with Hartford, Conn.-based Cornerstone Real Estate Advisers, a real estate subsidiary of Mass Mutual, to buy the hotel.
Jeff Stone, one of the partners in Ko Olina Co. and co-manager of the resort, said the combined operation of the hotel and the time-share units is a pattern that Marriott has used in the past.
Cornerstone's managing director, C.A. Anderson, is familiar with the Ihilani because he developed the hotel for JAL subsidiary Pan Pacific Hoteliers in 1993.
The company, now called Pan Pacific Hoteliers Nikko Hotels International, has done a great job developing and operating the hotel as a luxury destination, Anderson said.
Its main business, however, has come from Japan and Anderson said the Marriott connection will bring it new business from North America and elsewhere.
"It is a premier destination for the eastbound traveler and for local residents from Hawaii. Marriott will complement this effort by expanding the marketing direction to the westbound visitor," Anderson said.
Marriott is expected to take over the management in mid-November in what Anderson said should be a seamless transition, keeping the existing employees of the hotel and the golf course.
Marriott's existing operations in Hawaii are on the neighbor islands, a combination of hotel and time-share management businesses.
They are the Maui Marriott Resort & Ocean Club, the Kauai Marriott Resort & Beach Club, the Renaissance Wailea Beach Resort, and the Ritz-Carlton Kapalua.
Ko Olina Co. bought 344 acres of undeveloped land at the West Oahu resort in August 1998 and at the same time acquired an option to buy another 372 acres in a Ko Olina Phase II.
Last week, the developers broke ground for a 43-acre, 270-slip private marina development with a general store and a fuel station.
Ko Olina Co. said earlier that their long-term plan will create more than $1 billion in spending and create thousands of jobs in the area.
Ko Olina was started by Honolulu developer Herbert Horita, who envisioned a string of hotels and condominiums and at least two golf courses in the area.
The 18-hole Ted Robinson-designed golf course was built, as were four beach lagoons, the Ihilani hotel and some condominiums and houses, but Horita's plans mostly fizzled out when his Japanese backers withdrew as the Japanese economic bubble burst in the late 1980s.