Category: New Maui Developments
This week Honua Kai Resort in Ka’anapali just announced big price adjustments on their remaining inventory of condos for sale. Honua Kai is the first new beachfront fee simple whole ownership development in the Ka’anapali area for over 20 years. Located along North or Airport beach, It was well received by buyers with the initial pre-construction offerings selling out within hours. The high volume of closes at the complex have helped to buoy condo sales figures over the last couple of years. This is a phenomenon that we dubbed the Honua Kai effect. It is easy to see why buyers have gravitated toward Honua Kai. Amenities include three pools, a fitness center, kids camps, concierge services, a well regarded restaurant in Duke’s Maui and a great stretch of beach along the beautiful waters of the Pacific.
A number of the remaining condos for sale are now discounted well below initial developer pricing. One and two bedroom units in the Hokulani tower appear to be some of the better values with pricing as much as 40% below roll out pricing. There are other floor plans where prices are actually a little higher than the original roll out prices. While the developer does not go into the specific reasons behind the adjustments, this appears to be a classic case of supply and demand. Units that have and continue to garner the most interest have been adjusted upwards. Units where sales have lagged have been adjusted down. You can check out the Honua Kai Updated Price List for specific prices and floor plans available. These new developer offerings at Honua Kai are offered through Playground Destination Property, Inc. The Maui Real Estate Team may represent you as buyer’s agents. Contact us for questions about Honua Kai or for assistance with representation. We look forward to being of service.
There was big news yesterday on the Maui new development front when various media outlets reported that Wells Fargo was putting the Makena Resort into foreclosure. The resort was purchased in 2007 by Maui Developer Everett Dowling and Morgan Stanley for a sum of $575 million. The investors are in default on a loan of $192.5 million. The resort was the subject of a heated debate in 2008 when the developers applied to the county for the rezoning necessary to develop the 1800 acre site. The rezoning allowed for 1,100 luxury homes and condominiums. The debate pitted those who advocated the development for the jobs it would create vs. those who wanted to protect the natural and cultural resources of Makena. After passionate testimony from both sides, the county council passed the rezoning on a close vote.
What does this the foreclosure mean for future development in Makena?
- This will likely stall, but not completely stop future development in Makena. The development was likely to be slow to get off the ground prior to the foreclosure due to current market conditions.
- The bank will be looking for investors to continue with the development so they can maximize the resort’s sales price.
- Any new development will be subject to the same terms and conditions that the county requested as a part of the rezoning agreement.
- Everett Dowling would like to be a part of the ongoing development, but that is not a foregone conclusion at this point in time.
- Dowling’s Maluaka project in Makena will continue. This luxury development was already scaled down from a luxury condo project into a smaller development of 13 luxury home sites with an associated club house. This project was meant to be phase one of the broader Makena development.
- The Makena Golf Courses and Maui Prince Hotel which are part of the Makena Resort plan to continue operations.
We will continue to provide information on the Makena Resort foreclosure as it becomes available. In the interim, you can check out articles from the Pacific Business News, yesterday’s Maui News and today’s Maui News for additional information.
Maui Real Estate Blog
New Maui Luxury Developments Impacted by Global Financial Issues
Between 2006-2008, I posted fairly regularly on new development news on the island. A lot of this news was focused on the luxury segment as there were four major luxury condominium developments that were planned for Maui. If you read the blog on a regular basis, you may have noticed that my new development posts have been a lot less frequent over the last year. The global financial challenges and tight credit markets put the brakes on many of the island’s proposed luxury projects. Today’s Maui News has an article providing an update on various projects including Maluaka in Makena, Baccarat Wailea and the Villas at Royal Lahaina. Maluaka is being scaled down drastically from a 71 unit condo development to 13 luxury home sites. Royal Lahaina currently has its new luxury project on hold until economic conditions improve. The Baccarat project has been canceled with the future of the project site unknown at this time.
The Ritz-Carlton Club and Residences is the one luxury condo development that was actually able to finish construction. The newest luxury offering in Kapalua opened officially at the end of May. This luxury property offers 62 time share residences and 84 whole ownership condominiums. This were the furthest along in the construction process when the worst of the financial crisis hit. Despite having construction almost completed, the developers had their share of anxious moments. The now defunct Lehman Brothers provided the resort with their lending and they were left scrambling to find the financing necessary to complete the project. Now that they have completed construction, they find a sales environment with fewer potential buyers, but a lot less competition than what they would have faced.
While the financial crisis has caused a good deal of pain for developers and investors backing the proposed luxury developments, the delay and/or cancellation of Baccarat, Maluaka and Royal Lahaina Villas may ultimately be better for the health of the Maui luxury real estate market. The sheer volume of new luxury condos planned at these three developments threatened to flood the market with inventory and dilute values. As it stands, there is still plenty of new luxury inventory to choose from between the Ritz, resales at the Wailea Beach Villas and resale and new developer offerings at complexes like Ho’olei and Papali Wailea. Contact us today if you are in the market for a luxury condo or home on Maui. We are happy to offer our assistance.
There have been a variety of articles in the Maui News over the last 4 or 5 days related to development on Maui that I thought were worth linking to on the blog. A couple of the articles dealt with broader subject matters that will impact development as a whole on the island while there have been a couple of articles that are development specific. Here is a quick run down on the latest from the Maui News.
The most significant article may have been on the unveiling of the latest draft of the Maui County General Plan. Members of the General Plan Advisory Committee as well as members of the general public were able to see the latest efforts of one of the General Plan subcommittees last Saturday. The plan included recommendations on a number of subdivisions that have been proposed. Some major subdivisions were incorporated in the plan, others were scaled back and some were omitted altogether. The plan is not finalized at this point. There is a deadline of March 1 for the plan to be presented to the Maui County Planning Commission. They will review the plan for six months. At that point, the plan will be forwarded to the county council for their review and approval. The plan is subject to changes throughout this process. The General Plan advisory committee should be posting the plan at some point in the next couple of days on the county website.
The Workforce Housing ordinance is another subject that has the potential to impact new development on Maui. This ordinance was enacted a couple of years back. Essentially, it mandated that proposed residential developments of five homes or more should designate between 40 and 50% of the total units as affordable housing. Those units do not have to be in the same location as the development, but they were to be in the same community area. The Maui News reported that the Maui County Council reviewed the ordinance last week and invited speakers to participate. The speakers included both developers and local government agencies and non-profits that deal with affordable housing issues. The range of opinion was mixed, but many thought the ordinance merited some tweaking if it was going to be truly effective as a means of generating additional affordable housing inventory on island. Developers had issues with the restrictions imposed by the plan. The county council will discuss this issue again at their next meeting to determine if changes are in fact needed.
The state will start reviewing a proposed development in the Waikapu area just South of Wailuku town. Pu’unani would cover over 200 acres and would offer a mix of single family and multi-family housing. The proposed development has submitted a draft environment impact statement for review from the state. It is also subject to planning commission and county council review before it may be approved. It appears to face a hurdle in that it has not been included in recent drafts of the county general plan. Check out the Maui News article for more details on the development.
Today’s article is on a new development in Kihei that received SMA approval. The 25 lot subdivision received approval from the Maui Planning Commission yesterday. It will be located in the Waipuilani Road area of Kihei. The developers of the Sunset Estates subdivision will be creating building ready lots and will not be including home sales in the purchase. The lots will not have a homeowners association, but they will have building guidelines to be followed that were developed as part of the agreement to permit the subdivision.
We will continue to follow new development issues as they emerge on The Maui Real Estate Blog. As always, feel free to contact us with any questions on Maui Real Estate.
For those that are looking for spectacular home sites across the street from the ocean, Papa’anui in Makena is a new development worth your consideration. This small seven lot community is across the street from Makena landing and boasts beautiful views of the outer islands and Makena Bay. Makena Landing is an ocean sports hub. It provides easy access to snorkeling, scuba diving, kayaking and paddle boarding. You are just a short drive from all of the resort amenities and golfing in Wailea.
Lot sizes at Papa’anui range between 15,000 and 23,000 square feet. The community has established architectural guidelines to preserve the community’s sense of place and rural character. All utilities are in place including underground electric, and over sized water meters. Buyers interested in building will find a simplified permitting process as Papa’anui Makena has already gone through significant county approvals. Prices for lots range between $1,500,000 and $2,100,000. The Jalbert brothers may represent you as buyer’s representatives. Contact us for additional information or to arrange a showing. Check out the Papa’anui website for photos and additional information on the lots.
Over the last few years, Maui county has been working to revise and update the Maui County general plan. The plan is meant to provide a framework for future development and growth on the island. The existing plan was created in 1990 and drafts of a new plan were issued earlier this year. The draft issued earlier this year included urban growth boundaries that would increase density and protect open space. The mayor and the planning department called for a moratorium on new development approvals until the new general plan was completed and approved.
The sentiment to delay new development approvals until the community plan is finished appears to be losing traction. As the economic slow down has idled construction crews on the island, the Maui county council is looking at new development as a means of economic stimulus. This was seen most clearly when the county council approved the rezoning necessary to allow a new luxury development in Makena. This case pitted concerns about environmental and cultural impact, and preservation of open space against the need for new jobs, affordable housing and the efforts of a developer with a good reputation in the community. The preservation of and creation of jobs appears to have been the biggest factor in the approval of the zoning changes.
It looks like a similar battle is about to unfold over the Ma’alaea Mauka development. This is a project that has been specifically excluded from the draft of the Maui County General Plan as it is outside of proposed growth corridors. However, the project is in the process of being sold to Jesse Spencer. Jesse has distinguished himself among Maui developers for his affordable housing efforts. Jesse is just completing his most recent development project at Waikapu Gardens. He would like to start a new project at Ma’alaea Mauka. He is proposing that Ma’alaea Mauka will be at least 60% affordable. The prospect of jobs is an added carrot being dangled in front of council. The completion of Waikapu Gardens idled 150 workers. Spencer indicates that approvals of Waikapu Gardens will put those idled construction crews back to work.
It appears that this may become a recurring theme as developers propose new construction with the added incentive of increased employment. It will be interesting to see how Maui County balances the need for job creation with its intent to provide structured and sustainable growth. We will continue to follow new development proposals on THE Maui Real Estate Blog.