Central Pacific forecloses
on Coral Reef hotel

Central Pacific Bank has filed a foreclosure suit against the owner of the 247-room leasehold Coral Reef Hotel in Waikiki.

The bank filed the complaint last week against kamaaina developer Andre Tatibouet, saying he owes more than $15.1 million in principal and interest as well as accruing interest and attorney's fees.

Central Pacific asked the court to appoint a commissioner to sell the building's lease. The bank also wants to be able to buy the lease, which runs until 2050, if it chooses.

Tatibouet founded Hotel Corporation of the Pacific in 1968, and in 1986 began doing business as Aston Hotels & Resorts. In May 1998, he sold the business for $30 million to ResortQuest International, which is now owned by Gaylord Entertainment Co.

Tatibouet also got 1.7 million shares of ResortQuest but later disputes over the ownership of the Aston name and other matters pushed him out of the running of ResortQuest and Aston in March 2002. Tatibouet, however, kept the ownership of several properties, including the Coral Reef, a 21-story property on the makai side of Kuhio Avenue near the center of Waikiki.

Tatibouet, who bought the Coral Reef in 1976, announced plans to convert it into a hotel condominium in 2003. The units were to be sold for between $59,000 and $150,000 but managed as hotel units when the buyers didn't want to be there themselves.

Many people bought into the project, which stalled when the property's landowner, the Queen Emma Foundation, filed suit to stop the project. If the property went condo, the foundation feared the city's lease-to-fee conversion ordinance could force them to sell its fee-simple interest. In May 2004, a state judge ruled that Tatibouet could not sell units of the leasehold property as condominiums, blocking 247 tentative sales.