Turtle Bay talks fall through
Starwood, which was expected to buy some of the resort, backed away from a deal
Negotiations for Starwood Hotels & Resorts' acquisition of the Turtle Bay Resort have fallen through.
Starwood had expected to purchase a portion of the 880-acre resort on Oahu's North Shore on June 29, but this week backed away from the deal.
"We looked at it, we're still looking at it, but we've elected not to make an offer right now," said Keith Vieira, director of Hawaii operations for Starwood.
Starwood's decision to pull out of active negotiations with resort owner Oaktree Capital Management LP, came after a board meeting on Tuesday.
However, Vieira said the company is still interested in Turtle Bay, which is being quietly marketed by Eastdil Secured LLC.
Mergermarket, an independent service that provides merger and acquisition information to financial institutions, reported that Oaktree has $350 million in loans secured by the property, and the absence of a sale could force the company to restructure. It is unlikely Turtle Bay will get a cash infusion by its owners, Mergermarket said.
Eric Gill, secretary and treasurer of Unite Here Local 5, the union that represents workers at Turtle Bay, said, "We're disappointed the sale didn't go through. We hope that deal will be revived."
Oaktree Capital, a Los Angeles-based private-equity investment firm, couldn't be reached for comment.
Oaktree's local entity, Kuilima Resort Co., which has owned Turtle Bay since 1988, has considered multiple options in developing the resort, including a joint venture to create a stand-alone project, selling off individual parcels to developers or selling the entire property.
However, the resort has been caught up in labor disputes and controversy over native Hawaiian burial sites in recent years, as well as opposition to the site's zoning for five hotels with up to 3,500 hotel and condominium units.
"The good news here is we're talking about a $350 million valuation of the property, which could mean a much smaller development than originally planned," Gill said.