Friday, March 28, 2003

GE Capital forecloses
on 2 shopping centers

Star-Bulletin staff

GE Capital Hawaii has filed a foreclosure suit against the owner of Pearl Kai Shopping Center and nearby Westridge Center, and is asking the state Circuit Court to order the two Aiea malls sold to repay what it says it is owed.

GE Capital said the Japanese owner of the centers is in default on its loans, and as of Feb. 21 owed $13.5 million on Pearl Kai and $6.1 million on Westridge. In court papers, GE Capital said it lent Tokai Rayon Co. $24 million in the early 1990s to finance the company's purchase of the centers.

In addition to the almost $20 million that is now due, interest and attorneys' fees are continuing to pile up, GE Capital said in the action. Circuit Judge Karen N. Blondin is scheduled to conduct a hearing on the case April 16. GE Capital says its right to foreclose on the properties is not disputed by Tokai or its local subsidiaries, Pearl Kai Corp. and Pearl Holding LLC.

Tokai Rayon bought the centers in 1989. According to state records, Tokai paid $24 million to buy Pearl Kai from Kalauola Investment Co., then owned by local investors Tom Enomoto and Tom Gentry. Tokai paid $14.8 million to buy Westridge from Cormax Corp., a company that was owned at the time by Jack and Lydia Tsui of Panda Travel.

Pearl Kai is on land leased from Kamehameha Schools and Westridge is on land leased from the state.

Tokai Rayon's financing was completed in stages, starting in 1990, ending up with a single loan for $24 million covering the financing for both properties.

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