Lenders of the Turtle Bay Resort have rejected two offers by the state to purchase the pristine 858-acre property on Oahu's North Shore.

Gov. Linda Lingle's office said in a statement yesterday that the state is prepared to negotiate further, though the resort's interim manager said a government acquisition with public funds wouldn't be prudent, especially in the ailing economy.

“;Given our economic outlook in the near term, money should be expended and deployed for better uses,”; said Stanford Carr, who was selected last year by lenders to sell the property as part of a foreclosure settlement with owner Oaktree Capital Management L.P.

There is continued interest in the resort, though he wouldn't disclose the names of potential buyers.

Since Lingle pledged a year ago in her state-of-the-state address that government would seek to purchase the resort to block additional development of up to 3,500 hotel and condominium units, unsuccessful offers were made to lenders, including Credit Suisse Group and Wells Fargo & Co., on Aug. 10 and Nov. 25 - the latter of which was unsolicited, according to Carr. Terms of the offers weren't disclosed.

The state said its offers allowed for an exit strategy that would have eliminated or limited the use of taxpayer's money to acquire the land, including selling or working with other entities to purchase the existing hotel, golf courses, related businesses and condominiums, to finance the acquisition.

“;Under the current economic and capital markets climate the state continues to be a qualified and, we believe, a preferred purchaser,”; said Ted Liu, director of the state Department of Economic Development and Tourism. “;We also continue to stand ready to participate in or facilitate a transaction that would preserve the majority of the land in open space.”;

The government offers were based on the property's appraisal and the importance of maintaining current hotel operations. Offers also took into consideration the desire of residents in obtaining the leased fee interest under their resort condominiums.

Lingle last year approved legislation to help the state negotiate a deal to acquire and protect nearly 1,300 acres of land, including makai and mauka lands from Kahuku Point to Kawela Bay. The bill authorizes the use of eminent domain, though the state said it doesn't prefer that alternative.

However, Carr said most North Shore residents support at least some development of the rural coastline to bring much-needed economic growth to the area.

“;There is a silent majority out there that will support further responsible and sensitive development because they want jobs out there, especially in light of what's happen in the last year,”; he said.