Struggling ML&P, the project majority owner,
seeking boost from sales
By CHRIS HAMILTON, Staff Writer
reprinted courtesy Maui News 6/3/09
Over the weekend, the ultraluxury home joint venture between Ritz-Carlton and Maui Land & Pineapple opened - on schedule and with plenty of sales - at Kapalua Bay, officials for both companies said Tuesday.
"We opened on Saturday, and obviously we are pretty thrilled," said Jenny Ochtera, project director of 146-unit The Ritz-Carlton Club and Residences, Kapalua Bay. "To date, we've sold about a third of our properties, and we're delivering on time. . . . Despite these challenging times, we are absolutely leading the industry."
Design and construction began about four years ago on the $355 million project, which ML&P managed to keep afloat even after its main financial backer, Lehman Brothers Holdings Inc., went bankrupt last fall. ML&P is the majority owner of the project development company, Kapalua Bay LLC, and Ritz-Carlton manages the properties. Ritz-Carlton's parent company, Marriott International, is another investor.
ML&P has been embattled of late with leadership changes, multimillion-dollar quarterly losses and steep layoffs.
But Ryan Churchill, ML&P senior vice president, said the completion of this project marks a milestone for the local company toward realizing its development goals in the area. The housing joins the $175 million renovation of the nearby The Ritz-Carlton, Kapalua in which ML&P was a minority parter, as well as a zip-line adventure park, organic farm, other building renovations and new hiking trails.
"It's a kind of cornerstone that will lead to long-lasting value for the rest of the resort (and company)," Churchill said.
ML&P can next set its sights on its planned Kapalua Mauka and Kapalua Village projects nearby, which includes homes, a boutique hotel and commercial space, Churchill said.
The new The Ritz-Carlton Club and Residences, which officially opened Saturday on the site of the former Kapalua Bay Hotel, is divided into two distinct private ownership entities: the club and the residences. They share accouterments, such as private chefs, concierges, restaurants, indoor and outdoor pools, special golf course privileges, a 6,100-square-foot beach club and a 30,000-square-foot spa, with message therapy rooms and an oceanfront yoga studio, Ochtera said.
All the Ritz-Carlton facilities are reserved only for owners and their guests.
In addition, Ritz-Carlton will employ almost 100 people on the 24-acre property that boasts permanent, exclusive and very private residences as close as 15 feet from the water's edge.
Churchill said bringing back employment was one of the project's best accomplishments. He said he was thrilled to open the doors, especially in this economic environment.
"This really wraps up a lot of investment in the resort going on for the past five years," Churchill said. "With all the upgrades and amenities, we are looking forward to a long and prosperous future for Kapalua."
The Ritz-Carlton Club comprises 62 completely furnished two- and three-bedroom residences that are up to 2,257 square feet and cost between $350,000 and $850,000. The club is a fractional ownership arrangement, with each member purchasing use of their unit for 21 days per year.
Sales started in June 2008, and to date, Ritz-Carlton has sold 267 of the 744 available club memberships within two buildings, Ochtera said. That includes 25 sales this quarter, despite the rough economy, she said.
"We are really the only property opening right now," Ochtera said.
The Ritz-Carlton brand and services, along with the extraordinary properties and gorgeous location, sells the residences, Ochtera said.
And of the 84 full-time homes, they've sold 32 so far, she said. The residences, which are up to 4,271 square feet spread between four buildings and each come with a private elevator, cost between $3.9 million and $9.8 million, Ochtera said.
ML&P could use the boost.
The company lost $13.2 million in the first quarter that ended March 31, and each segment from agriculture to community development and the resort lost money. ML&P decided to sell its world-famous Plantation Golf Course for $50 million cash to make ends meet.
But now the company has a stunning new property to add to Kapalua Resort's "portfolio of luxury living," Churchill said.
* Chris Hamilton can be reached at chamilton@mauinews.com.
reprinted courtesy Maui News 6/3/09
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