Turtle Bay exec: further development needed
The new interim manager of the Turtle Bay Resort has determined that further development at the controversial North Shore property is necessary to keep the operation viable.
Local developer Stanford Carr, installed last week by resort lenders to head operations and find a buyer, said expansion outside of the existing resort's footprint is an option, since a new owner would need to satisfy the conditions of a 1986 agreement that calls for public parks and other amenities to be built by a developer - who would need to recoup the investment.
"It's got to have economic equilibrium - they can't maintain a vast amount of land like that," said Carr, who was recruited by the property's lenders, including Credit Suisse and Wells Fargo, because of his expertise in the Hawaii real estate market. "Raw land is probably the worst investment, you can't depreciate it. You just don't have the economies of scale at the moment."
Due diligence, feasibility studies and quantifying the costs of public improvements must be completed before determining the scope of any expansion, he said.
The isolated character of Turtle Bay located on one of the island's last remaining rural coasts has been an attraction for visitors seeking a neighbor island-type of resort on Oahu.
"It's very pristine and so that has an attraction, but again you have to have the right execution of the product," he said. "Like anything, it's got to be responsible development."
His first priority is to meet with the community to gain an understanding of their concerns and also with local representatives of resort owner Oaktree Capital Management L.P. to resolve maintenance issues at the 858-acre property with money budgeted by lenders.
New York-based Eastdil Secured LLC is preparing material to begin marketing resort assets, possibly within the month, Carr said.
Eastdil ceased marketing when Credit Suisse filed a $283 million lawsuit last December against Oaktree's local entity, Kuilima Resort Co.
Meanwhile, Gov. Linda Lingle has been campaigning for the state to acquire the resort to protect it from plans to build an additional 3,500 hotel and condominium units on the property.
Carr, a Lingle supporter, hasn't seen a proposal from the state yet, but said his role doesn't mean a state acquisition will be easier.
"Sometimes it could be even more difficult, it could go both ways," he said.
There is a "mutual trust" because of the long relationship he has with the governor, but the decision ultimately lies with the owners and lenders, he said.
"The state is competing much like the rest of the other interested buyers," Carr said. "Everybody wants a win-win situation. I'm born and raised here, I'm fifth generation, I'm going to do the right thing."