By Kathryn Bender, Star-Bulletin
Picturesque Aloha Tower is at the center of
a troubled shopping complex.
complex being sold
A mainland-based investment groupBy Rick Daysog
is buying the mortgage to
the troubled center
A Chicago-based investment group is buying the $60 million mortgage to the Aloha Tower Marketplace, a deal that could bring new money to the troubled waterfront retail complex.
Trinity Investment Trust L.L.C. signed a purchase agreement with Japan-based Mitsui Trust & Banking Co. last night to acquire the mortgage to the Honolulu Harbor project, according to sources familiar with the deal.
The price was not disclosed but many expect that it will be lower than the $60 million mortgage amount.
Chad Griffith, Mitsui's attorney, this morning declined comment on the specifics of the deal, saying only that the sale of the mortgage was progressing well.
Jon Miho, attorney for Trinity, also declined comment.
Trinity's investors include former VMS Realty and Resort Income Investors Inc. executive George Ruff and isle developer Charles Sweeney, who built the 413-room Embassy Suites Resort in Kaanapali and the 450-room Kea Lani Hotel in Wailea.
Completed in 1994, Aloha Tower Marketplace was built at a cost of $100 million. The complex covers 165,859 square feet of commercial space on land leased from the state. The project pays an annual lease rent of $1 million to the state.
Last year, Mitsui put the mortgage up for sale. The bank had filed a foreclosure suit in September against the project's developer, Aloha Tower Associates, alleging that the developers didn't make payments on the $60 million loan it issued in September 1993.
Aloha Tower Associates sued Mitsui in May, 1996, charging that the bank reneged on more than $600 million in financing.
The state Aloha Tower Development Corp., which oversees the project, said it was aware of the agreement but was not told the buyer's name. Andy Beaman, ATDC attorney, said the state welcomed the deal, which is expected to close at the end of July.
"We view this as a positive development," he said.
This is not the first deal between Mitsui and Trinity.
In September, AHI Harbor Limited Partnership, a joint venture between Trinity and New York-based Apollo Advisors L.P. bought the $130 million mortgage to the nearby Harbor Court luxury high-rise from Mitsui for an undisclosed, discounted price.
Apollo is headed by former Drexel Burnham Lambert Inc. merger-and-acquisitions specialist Leon Black.
Trinity and Apollo also have teamed up with local builder Mike McCormack to acquire a share of the Embassy Suites Resort.
That investor group is bidding with time-share operator Signature Resorts Inc. for the Maui hotel. Mitsui is one of several lenders at Embassy Suites.