plans to redevelop Renaissance Wailea Beach Resort as a Baccarat luxury condominium project, resort real estate ran into unrevealed problems much earlier than last year's financial crash.
Property's future up in the air
By HARRY EAGAR, Staff Writer
reprinted courtesy Maui News 1/30/09
The Renaissance Wailea Beach Resort looks like a wet ghost town as viewed from the oceanfront sidewalk Wednesday morning. The resort was closed in September 2007 and was supposed to be demolished to make way for a luxury condominium project under the Baccarat name.
WAILEA - The Renaissance Wailea Beach Resort hotel has not been torn down as planned, and its owner, Starwood Capital Group, is not saying whether plans to redevelop it as a Baccarat luxury condominium project are dead.
While Starwood officials are remaining tight-lipped about their plans, Bud Pikrone, general manager of the Wailea Community Association, said this week that he expects some announcement within three weeks.
The financial situation for ultraluxury resort real estate is much different today than it was in 2005 when the rebuilding of the Renaissance as a $250 million condo-hotel was announced. In 2006, Hawaii resorts enjoyed a record $3 billion in revenue.
But the transformation of the Renaissance ran into unrevealed problems much earlier than last year's financial crash.
At first, the new project was to be a St. Regis, a nameplate associated with a famous Manhattan hotel that was being used by Starwood Hotels & Resorts to label a worldwide chain of luxury residences.
Starwood Hotels is not affiliated with Starwood Capital.
By mid-2007, Starwood Capital was launching a luxury label of its own, this time named for the French glassmaker Baccarat, and the Wailea project was renamed.
It was to be the first project for the Baccarat chain, with the Kobayashi Group as a minority owner of the Wailea redevelopment. Although Starwood Capital obtained a special management area permit for the project, things went slowly on Maui and the first Baccarat opened in the West Indies.
The Renaissance closed in September 2007. Demolition was supposed to have been completed by the beginning of 2008, and the condominiums were scheduled for completion around the end of last year. That was later pushed back to 2010.
A statement released Wednesday by Starwood Capital in New York said: "We are going to take some time and pause to determine the proper course of action for our properties and evaluate some additional possibilities."
Starwood Capital is privately held, so information about its financial status is scarce. However, some of its operations have been hammered like those of other investment companies. It formed a publicly traded real estate investment trust, IStar Financial, which made and purchased loans. IStar stock traded at $50 at the beginning of 2007 and was down to $1.39 this week.
A small venture that Starwood was a partner in, BR Guest LLC, had a chain of 15 expensive eateries in Chicago and New York, and four of them closed two weeks ago.
Baccarat had much bigger projects than the one at Wailea, including one in Dubai that was to have cost nearly $700 million. The status of that development could not be learned, but Dubai and other Gulf states' real estate markets have been hit at least as hard as anywhere else in the world.
The Renaissance was the first hotel opened at Wailea in 1978, originally as the Wailea Beach. It went through a number of owners and names, and as the Stouffer Wailea Beach Resort was a AAA Five Diamond resort.
It had 349 rooms and employed nearly 350 people. The lot is 15.5 acres, and Starwood Capital's plan was to clear it to the ground and build a much smaller condominium resort, which would have operated as a hotel. The proposal was for 193 condos, with 2005 prices of around $1.5 million and up.
The hotel has buildings as tall as seven stories. The new plan would have been lower and more open, with much of the infrastructure, including parking, underground.
Starwood also committed to improving the county-owned Ulua-Mokapu Beach Park next door by adding 22 public beach access parking stalls, streetlights and two benches.
Although Starwood Capital is not related to Starwood Hotels & Resorts, its founder, Barry Sternlicht, was once chief executive of Starwood Hotels.
* Harry Eagar can be reached at heagar@mauinews.com.
reprinted courtesy Maui News 1/30/09, original link www mauinews.com/page/content.detail/id/514279.html
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