Thursday, June 26, 2003

Connie Cheng, assistant to receiver Joseph Toy, took down a sign yesterday after the auction of the Royal Kaanapali Golf Courses at state Circuit Court. The state acquired the courses to offset a debt by Amfac.

State acquires 2
Kaanapali golf courses

The state Employees' Retirement System acquired two 18-hole Maui golf courses at a foreclosure auction yesterday in a legal settlement with former Big 5 company Amfac, which allegedly owes the state $96 million from a 1991 loan.

The state pension fund was the only qualified bidder for the courses at a public auction held at noon on the steps of state Circuit Court in Honolulu. If the purchase is confirmed by the court, Amfac's debt to the state will be wiped out, and it will be up to a state pension fund adviser to decide what to do next with the Royal Kaanapali Golf Courses.

For now, the state plans to continue running the two courses, which are in the Kaanapali resort area of West Maui, said Rick Humphreys, trustee for the state pension fund. The golf courses have about 76 employees.

State investment manager Heitman Real Estate Services Group of Chicago is studying the best use for the courses, such as selling them, and has the authority to decide what to do with the property once the state acquires title, Humphreys said.

The two courses have been managed since March 2002 by Honolulu receiver Joseph Toy.

The state could technically be outbid at the court confirmation hearing, but the bidders would have to be prepared to pay at least $63 million for the two golf courses.


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