Maui Real Estate Blog
Makena Resort Investors in Default
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.