Lawsuit stalls Makena Resort sale

Ulupalakua Ranch alleges Seibu failed to honor easements cited in a 1987 sale

The $575 million sale of the Makena Resort has been delayed by a lawsuit filed by Ulupalakua Ranch Inc. claiming that owner Seibu Group has breached land-access contracts dating back to the 1980s.

The sale of the 1,800-acre Maui resort to Dowling Co., Trinity Investments and Morgan Stanley Real Estate was set to close on March 27, but has been delayed until the lawsuit is resolved.

"Makena Resort and the Maui Prince Hotel will continue to operate as normal under the management of Prince Resorts Hawaii until the matter is resolved," according to a statement released by Prince Resorts.

The ranch, which is adjacent to the resort, in 1987 sold about 700 acres of land to Japan-based Seibu and created an easement across ranch land to allow Seibu to secure county approvals required for the purchase.

Seibu agreed to dissolve that easement in two years, but never did, according to the lawsuit filed March 21 in Second Circuit Court against subsidiaries of Seibu.

The suit also claims that Seibu agreed to let the ranch retain other access rights across the land, but did not record them with the state, which means they would potentially be dissolved once the resort is sold.

Sumner Erdman, president of Ulupalakua Ranch, wouldn't comment on the suit. His attorney, David Merchant, was unavailable for comment.

The sale of the resort includes the 310-room beachfront Maui Prince Hotel, two golf courses and 1,300 acres of undeveloped land, which is expected to be the site of a large residential community.