Lingle’s strategy to protect Turtle Bay is noble but difficult

THE ISSUE Gov. Linda Lingle has proposed that the state buy Turtle Bay Resort to protect vacant portions from planned development.

GOV. Linda Lingle's proposal for the state to purchase Turtle Bay Resort and prevent further development on surrounding property owned by the same company is welcome news for people who want to preserve Oahu's "country." The question is whether the state can put together what Lingle calls "mix-and-match revenue streams" to pull it off. The effort is noble and worthwhile.

Lingle called for the formation of a "working group" to develop a plan to buy and preserve the 850 acres of undeveloped resort-owned land while reselling the resort itself to a hotelier. As the governor pointed out in her State of the State address to the Legislature, the state has been involved in similar purchases.

In 2006, the city, state, Army, the Office of Hawaiian Affairs and private donors assembled $14 million to buy Waimea Valley from German-born entrepreneur Christian Wolffer. Last year, essentially the same coalition went together to buy 1,129 acres stretching from the Pupukea-Paumalu coastal bluffs to the North Shore for $8 million from Obayashi Corp., a Japanese construction company.

Those two acquisitions pale in comparison to the amount needed to buy the Turtle Bay property. Kuilima Resort Co., an affiliate of Oaktree Capital Management, a Los Angeles investment firm, was targeted last month with a $283 million foreclosure lawsuit by Credit Suisse. Kuilima had tried unsuccessfully to find a partner or buyer during the past year to build as many as five hotels with 3,500 rooms on the property.

A master plan for development of the property was approved by the city in 1986, but Kuilima has limited improvements to $100 million over the past two decades. The company rejuvenated its more ambitious plans in 2006 and a state judge rejected a lawsuit a year ago by the Sierra Club and a community group asking that Kuilima be required to conduct a new environmental study. The judge's ruling is on appeal.

As long as the ruling stands, Kuilima can continue looking for a buyer who can offer a price with which the "mix and match" coalition envisioned by Lingle will have to compete.

The governor said potential sources of money include "selling off the resort portion of the property to pay down the debt, exchanging other state lands, creatively using tax credits spread out over time, a tax check-off on our income tax returns, private grants, allocating Legacy Land Funds, federal conservation dollars and a worldwide Internet fundraising campaign to 'Save Hawaii's North Shore.'"