Ritz-Carlton partners in Kapalua Bay
The luxury hotel company and Exclusive Resorts will become part of the planned $300 million resort
Maui Land & Pineapple Co. announced plans yesterday to partner with two high-profile luxury hotel companies to develop Kapalua Bay, a $300 million condominium resort that will replace the soon-to-be-razed Kapalua Bay Hotel in West Maui.
MLP, which bought the Kapalua Bay Hotel in 2004 and is a 51 percent partner in the new development, has brought in the Ritz-Carlton Hotel Co. and Exclusive Resorts SM LLC to help further reposition its Valley Isle property.
The 196-room Kapalua Bay Hotel will be razed in June so that construction on the 24-acre complex can begin in August. When complete, the Kapalua Resort will encompass three beaches, 54 holes of golf, the 548-room Ritz-Carlton Kapalua, the 292-unit Kapalua Village and an upscale second-home community.
COURTESY MAUI LAND & PINEAPPLE CO.
The planned $300 million condominium resort Kapalua Bay will replace the soon-to-be-razed Kapalua Bay Hotel in West Maui.
The project, slated for occupancy in 2008, is at the center of the company's revitalization plan for its 23,000-acre resort, said David C. Cole, chairman, president and chief executive of Maui Land.
"Hawaii for all its fame has not really been seen as a luxury destination," Cole said. "Tourism has been defined by arrivals, but we are moving toward a business plan where less is more -- we want fewer people, more discriminating travelers. We want to attract customers that share our appreciation of this place."
Cole's vision for tourism in Kapalua parallels recent efforts by the Hawaii visitor industry to reposition the overall resort market by concentrating on the quality of the visitors rather than the quantity. With visitor arrivals expected to go above a record 7.4 million this year, marketing efforts have been directed toward attracting higher-spending visitors. Pressure also has been put on the industry to reduce demands on infrastructure and the environment.
The new development will include 84 private homes and 62 condominiums, offered as part of the Ritz-Carlton Club to be sold in deeded one-twelfth fractional ownership interests.
Fractional ownerships resemble time shares -- but with owners holding a legal deed to the property -- and typically involve higher-priced properties and fewer owners per unit.
This partnership marks the first time that Ritz-Carlton has offered its fractional property ownership in Hawaii, said Robert Phillips, senior vice president of business development for the Ritz-Carlton Club. The company operates four other fractional ownership communities in Colorado, the U.S. Virgin Islands and Florida.
Financial aspects of the partnership pencil out, Phillips said.
"We've found that our ability to develop real estate along with hotels has been a great catalyst to the growth of our hotel portfolio," Phillips said. Selling property offers developers a quicker return on their investment, which in turn can help lessen the debt requirement on a new hotel property.
Exclusive Resorts will purchase 28 of the private homes for use in its vacation program, which caters to 1,800 members who have access to a portfolio of 300 luxury residences in 36 destinations.
While Cole's vision for development of Kapalua Bay aggressively seeks to increase average daily rates at the resort from the $295 range to $495 range by offering unique services to an elite group, it is also focused on conservation. When the resort is complete, an unprecedented 20,000 acres of the property will be open land, he said.
"It's going to be almost like a national park," Cole said. "We're creating a great experience for those who work and visit here."
Kapalua Bay will encompass nine structures, rising from three to six stories, and will follow the contour of the coastline, offering vistas of Molokai and Lanai. The Ritz-Carlton Club property will include 18 two-bedroom, 1,800-square-foot condominiums as well as 44 three-bedroom, 2,100-square-foot condominiums. Prices at most Ritz-Carlton Clubs range from $150,000 to $500,000, but these will likely be more, with units on high floors running in the $700,000s, Phillips said. Ritz-Carlton will begin taking contracts in July, he said.
There also will be 84 three-bedroom private residences, which will range from 3,000 to 4,000 square feet. Prices for these resort homes, which will go on the market by the end of this month, will start at $4 million, Cole said.
The homes will be joined by a 6,100-square-foot beach club and an 8,500-square-foot, multilevel recreational area including a lagoon-style pool, bar and grill. Kapalua Bay residents will have access to Kapalua Resort golf and dining privileges as well as a 30,000-square-foot spa, all managed by Ritz-Carlton.
Staffing the development is expected to add about 188 jobs to the 200 or so already at the resort. With unemployment at a historically low 2.4 percent, MLP is starting a recruiting campaign called "Stay home, come home," which seeks to entice kamaaina workers and expatriates back into the work force by addressing their concerns about affordable housing, adequate schools and health care, said Terri Freitas Gorman, director of corporate communications for MLP.
"If you've got (workers) who are mispronouncing street names, it's not a happening thing," Cole said.
MLP also is developing two affordable housing subdivisions for workers including Pulelehua in West Maui and Halii Maile in upcountry, Gorman said.