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Developer agrees
to buy Kauai’s
Grove Farm

Sources say the Honu Group
has signed a letter of intent and
could finalize a deal in months

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By Rick Daysog
Star-Bulletin

The developer of the King Kalakaua Plaza retail complex in Waikiki has signed a letter of intent to buy Kauai landowner Grove Farm Co., people familiar with the negotiations said.

The Honu Group Inc. is conducting a due-diligence review of financially troubled Grove Farm, which owns 22,000 acres on Kauai including the Kukui Grove Shopping Center in Lihue. But sources said it could take a few months before a definitive agreement is struck.

The proposed deal also would be subject to shareholder approval. Terms of the deal were not available.

Randy Moore, a Grove Farm director and member of a special committee that is overseeing the sale of the company, confirmed a preliminary deal but declined to identify the prospective buyer due to a confidentiality agreement.

Tom Applegate, president for the Honu Group, declined comment.

Last January, Grove Farm's shareholders rejected a $21 million offer from mainland Internet entrepreneur Scott Blum. Blum, the founder of Aliso Viejo, Calif.-based Buy.com Inc. is the son-in-law of Hugh Klebahn, Grove Farm's chairman and chief executive officer.

Founded in 1864, Grove Farm is largely owned by the descendants of George Norton Wilcox, an early sugar industry pioneer.

The closely held company has been in financial turmoil as a result of the economic downturn caused by Hurricane Iniki. The company borrowed substantially to pay for expansion of its residential and commercial projects, only to see revenues tumble in the aftermath of the 1992 hurricane.

The company earlier this year listed debts of $60 million and assets of $85 million.

The Honu Group is the developer of the 80,000-square-foot King Kalakaua Plaza at the Ewa end of Waikiki. Tenants in the complex include NikeTown and the Official All Star Cafe.