Kapalua Bay
Hotel soldBuyer Maui Land & Pineapple
will integrate the property into
its Kapalua Resort master plan
Kapalua Bay Hotel, a 196-room Maui luxury resort opened in 1978, is about to change hands again.
Maui Land & Pineapple Co., the developer and operator of the Kapalua Resort master-planned community, said yesterday it has signed an agreement to purchase the property from a fund advised by investment firm Morgan Stanley.
MLP declined to disclose the purchase price, but David Cole, chairman, president and chief executive of MLP, said it was higher than the $19 million the property sold for eight years ago.
Cole said MLP plans to operate the hotel as an integral part of the Kapalua Resort.
"Our first task is to regain control of our destiny down on the water," Cole said. "Then we can look at other steps that are necessary to reposition the overall resort up market."
The hotel, which had a $20 million renovation four years ago, has been managed as part of Starwood Hotels & Resorts Worldwide Inc.'s Luxury Collection brand since Feb. 1, 1999.
"The Kapalua Bay Hotel is a vital component in our revitalization plans for the overall resort," Cole said.
MLP, which last month reported first-quarter net income of $1.5 million on $40.3 million in revenue, said the transaction is expected to close sometime next quarter.
The Kapalua Bay Hotel was purchased for $102 million in 1990 by Japan-based KBH Operations LP but sold for less than a fifth of that amount in 1996 to New York-based YCP Kapalua LP, a partnership managed by Yarmouth Group. A series of mergers involving the Yarmouth Group resulted in management of the property by Morgan Stanley.
Kapalua Bay Hotel sits on 18 acres that are part of the 23,000 acres owned by MLP in West Maui.
"We're redefining Kapalua," Cole said. "Instead of 1,600 acres, which includes our three golf courses, two hotels and seven different communities, we're redefining Kapalua as 23,000 acres. Our goal is to place roughly 20,000 of the 23,000 acres we have in permanent easements, conservation, open space and agricultural so the effect 15 or 20 years out is that this whole portion of West Maui will feel and look like a national park.
"In short, we're concentrating development on the remaining 3,000 of the 23,000 acres."
Keith Vieira, Starwood senior vice president of operations for Hawaii and French Polynesia, said the company has about 200 full-time employees at the hotel and that in previous sales most employees have been retained. He said it's too early to tell what will happen to the employees this time or whether Starwood will be kept on to manage the hotel.
"Maui Land & Pineapple is putting together its plan and it's our role as the manager to help whoever the buyer is -- whether it involves us or not," Vieira said.