Maui Prince may be demolished

The new owners may rebuild it as part of a larger development

The 21-year-old Maui Prince Hotel may be demolished and repositioned to target a more affluent market, according to a plan being considered by the new owners of the Makena Resort.

Resort owner Everett Dowling briefed employees and their union on the demolition option in July, said William Kennison, Maui division director for the International Longshore and Warehouse Union Local 142, which represents more than 300 workers at the hotel.

Dowling Co. and Morgan Stanley Real Estate purchased the 1,800-acre resort that includes the hotel in June.

Dowling said the owners are examining a number of possibilities for Makena.

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The new owners of the Makena Resort are considering a plan to demolish and rebuild the 21-year-old Maui Prince Hotel as part of a larger development that would include a condominium hotel and luxury homes.

Hotel employees and their union were briefed by owner Everett Dowling on the tentative plan in July, following the acquisition of the 1,800-acre resort, which includes the 310-room beachfront hotel, two 18-hole golf courses and some 1,300 acres of undeveloped land.

Dowling Co. and Morgan Stanley Real Estate purchased the resort for $575 million in June.

"They're thinking of tearing down the hotel to put up a brand new hotel," said William Kennison, Maui division director for the International Longshore and Warehouse Union Local 142, which represents more than 300 workers at the hotel, built in 1986.

"What his plans were, as indicated to us, was to make it a more upscale hotel. The way the hotel is constructed, to improve the property to the point where they could make it into an upscale property, to just renovate it would be too costly," Kennison said.

However, Dowling said no final plan has been determined, and that developers are examining a number of possibilities for Makena.

"Obviously, as members of the Maui community, we intend to work toward respecting the welfare of the employees of the resort, no matter what the final plan is," he said.

Liana Mulleitner, marketing manager for Prince Resorts Hawaii, which has a contract to manage the hotel through March, said she was unaware of the owners' plans for the property.

An employee of the Maui Prince who asked not to be identified said that Dowling indicated that the hotel would likely be demolished in 2010, and that the owners were trying to get other areas of the resort renovated and built as quickly as possible to accommodate employees displaced during the redevelopment.

Kennison said developers haven't shown the union any written plans, and that no proposals have gone before the Maui County Council.

"They haven't done any architectural work or studies on the Maui Prince," he said. "It'll be another couple years before things start happening."

Developers want to rezone the property to redevelop the golf course to build luxury residences, affordable housing and a small condominium hotel, he added.

Building a brand-new hotel from the ground up would allow a developer to add amenities, increase density and rooms to generate more revenue from a luxury target market, said Mike Hamasu, director of consulting and research at Colliers Monroe Friedlander Inc.

In addition, redevelopment could make the hotel more energy efficient and thereby cost effective to operate, resulting in lower costs in the long term, he said.

"There's a lot of options when you decide to go through a full-scale development," Hamasu said. "When you renovate, you usually keep the majority of the property. It's cheaper but you're stuck with how it's currently designed."

Maui is the favored destination for many high-end visitors from the mainland, with average daily room rates exceeding the other islands.

Repositioning the Maui Prince could significantly boost revenue, thereby allowing developers to recoup their investment in the property quicker.

The Maui Prince, which is considered an upscale property, has published rates for 2008 ranging from $380 to $1,500 per night.