Tatibouet lines up loan to keep hotel
The financing by Canyon Capital is secured by the Coral Reef Hotel and the hotelier's home
Well-known Hawaii hotelier Andre Tatibouet, who filed for Chapter 11 bankruptcy in April to block a possible foreclosure on the Coral Reef Hotel in Waikiki, has secured a $40.5 million loan from Canyon Capital Realty Advisors that is expected to allow him to keep ownership of the property.
Tatibouet, the founder and former owner of Aston Hotels & Resorts, is planning a $7 million renovation of the 247-room Coral Reef in mid-April that will include upgrading the hotel's public spaces and all of the guest rooms.
The loan is secured by the Coral Reef and an 18,000-square-foot home owned by Tatibouet in Diamond Head.
"Many lenders would have been unable to close this financing because of the many complications involved in the bankruptcy process, but Canyon stood by me every step of the way," Tatibouet said. "They demonstrated professionalism, determination and business acumen while always being sensitive to my personal situation."
Honolulu attorney Chuck Choi, who represents Tatibouet, said he hopes to have a confirmed bankruptcy reorganization plan within the next six months. Central Pacific Bank, which had been threatening to foreclose on the hotel, has since been paid the $15.5 million it was owed, Choi said.
Tatibouet, who has been involved in the Hawaii hospitality industry for more than 35 years, named Aqua Hotels and Resorts, a company founded by Hawaii hotelier Mike Paulin, to manage the property. In addition to the property being reflagged as an Aqua Hotel, it will be affiliated with Sterling Hotels.
The Coral Reef renovation comes as the Waikiki hotel market goes through heightened demand amid a record number of tourists, who last year topped 7 million for the first time. The industry also has suffered the loss of more than 1,500 conventional hotel rooms that have been converted into time-shares and luxury condominiums or razed to make room for new high-end hotels.
"Working with Andre is consistent with our company's previous efforts to boost economic development in the Hawaiian islands," said Jonathan Roth, a principal of Beverly Hills, Calif.-based Canyon. In the past two years, Canyon has invested more than $150 million in several projects in Hawaii, including the redevelopment of a shuttered hotel on the Kona Coast into the Sheraton Keauhou Bay Resort.
Tatibouet, who bought the Coral Reef in 1973, announced plans to convert it into a hotel condominium in 2003, but those plans were quashed when the property's landowner, the Queen Emma Foundation, sued to stop the project. The foundation feared that if the project went condo, the city's lease-to-fee conversion ordinance could force it to sell its fee-simple interest.
In May 2004, a state judge ruled that Tatibouet could not sell units of the leasehold property as condominiums, blocking 247 tentative sales. The city's lease-to-fee conversion ordinance was repealed last year after Mufi Hannemann took over as mayor.