Credit crunch applies brakes to sale, layoffs
By ILIMA LOOMIS, Staff Writer
reprinted courtesy Maui News 11/11/08
WAILUKU - The global credit crisis has struck Maui again, putting into question
the sale and redevelopment of the Aston Maui Lu in Kihei.
The Maui Lu had been scheduled to close Monday for a three-year overhaul, laying off 41 employees. But an attorney representing landowner 575 South Kihei Road LLC said the aging hotel will remain open indefinitely while the financing of the sale to Marriott Ownership Resorts is worked out.
"Right now the sale of the hotel is an open question," said attorney Paul Mancini.
The Maui Planning Commission had been scheduled Monday to hear a request to transfer a special management area permit for redevelopment of the property from landowner Genesee Capital, a partner in the limited liability company, to Marriott. But the commission postponed the hearing to Jan. 13 after receiving an e-mail request from Marriott Vacation Club Senior Vice President Donald Baarman requesting a deferral.
Baarman said Marriott is still in "active discussions" related to the purchase of the hotel, and cited the tightening U.S. financial market in his e-mail.
Mancini said the owners had notified the Maui Lu's management company, ResortQuest Hawaii, that the hotel would not close for the time being, and ResortQuest had informed employees.
He expected questions about the sale and redevelopment would be resolved by the commission's Jan. 13 hearing.
The Maui Lu isn't the first major project on Maui to feel the pinch of the national and international credit crisis.
Maui Land & Pineapple Co. and its partners in the redevelopment of the Kapalua Bay Hotel lost financing for the project when investment bank Lehman Brothers filed for bankruptcy in September. ML&P has said it is looking for new lenders.
The Maui Lu owners obtained a special management area permit in March to demolish the 46-year-old resort and build a 388-unit time-share complex on the hotel's sprawling 26-acre property on South Kihei Road.
Because the permit had been contested by the neighboring Maui Beach Vacation Club, the Planning Department was required to schedule a public hearing for the permit to be transferred to the new owners.
* Ilima Loomis can be reached at iloomis@mauinews.com.
reprinted courtesy Maui News 11/11/08, original link www mauinews.com/page/content.detail/id/510904.html?showlayout=0