Maui Real Estate & Development

News about Maui real estate and development continue to be on the front page of the local newspapers.  Each of the news is worthy of discussion.   I should have posted each topic daily as it got published, but I did not get a chance. So tonight I decided to do a round-up. Feel free to comment on the topic that interest you. I will start with the most recent and move down to last week.

Panel Reviews Honua’ula Development Compliance.

A year after its approval, the controversial Honua’ula housing and golf course development in South Maui is moving slowly with a required environmental impact statement and the hiring of several consultants and consulting firms. The project came before the County Council’s Planning Committee Monday as it reviewed a mandatory annual compliance report by Honua’ula’s developers.  Honua’ula, designated Kihei-Wailea Project District 9 (Wailea 670) in the community plan, proposes 1,400 housing units, half of which will be priced as affordable under federal guidelines. Plans include the construction of a private golf course, water wells and a wastewater treatment plant.  Construction on the project is expected to begin in five years if permits are approved and if Honua’ula prevails in legal challenges to its plans. Continued on Maui News

Isle Luxury Projects In Limbo Over Financing.

Keaka, Everett Dowling’s development company, was at the Maui Planning Commission last week to seek an amendment to permits for its Maluaka project to drastically downsize the project from 71 luxury condominiums to 13 lots plus recreational facilities. The commission favored it, also praising Dowling for seeking LEED “green” certification on his development. Demand for luxury housing is down, but it appears that lack of financing is an even greater impediment to developments and redevelopments along Maui’s golden shores. ”We lost our financing,” Dowling said of his Maluaka project at Makena, even though half the units had been presold. For a while in February, he shut down the site work while he sought new lenders. ”We took it to 126 lenders and got one term sheet” – the response showing what the lender was prepared to do.  Dowling said he read about that lender, a bank, being in danger of failing, so he declined to pursue a loan. With memories of Maui Land & Pineapple Co.’s narrow brush with disaster at The Residences at Kapalua Bay when lender Lehman Brothers failed, Dowling said a repeat of that trap “was the last thing I wanted.” Continued on Maui News

Projects On Haitus Due to Scarce Fund

After large real estate projects, electricity generation is the biggest consumer of capital among private businesses in Maui County.  There are several costly projects pending, and while some developers say even today money will be available, the closer the project, the further off the lenders seem to be.  Money problems have stalled two projects being pursued by Kent Smith and his partner, Hilton Unemori – a biomass generator at Hamakua on the Big Island that was to have been fueled by eucalyptus wood and an expansion of Kaheawa wind farm on Maui. ”About the time we went to the markets, credit started to freeze up,” Smith said of the $200 million Big Island project.  Pacific Biodiesel was planning a 5-million-gallon per year refinery on the Big Island, and even though owners Bob and Kelly King were bringing in their own money for half of it, the relatively small amount of additional money needed is not yet there. Kelly King said: “Our Big Island Biodiesel plant has taken longer than expected to get fully funded. We are currently seeking the final 10 to 15 percent of funding before we can announce a groundbreaking.” Smith and Unemori’s expansion of Kaheawa is being held up more by slowness in reaching a power purchase agreement with Maui Electric Co., but Smith said financing is an issue, even with the financial clout of his much larger partner, First Wind. Even if the money can be found, the terms and collateral demands are no longer workable. “If the risk-to-return expectations are higher, (the offers) reduce the return to the developer,” said Smith, sometimes to the point where it is not worth the effort to go ahead. Continued on Maui News

It’s interesting that Maui News has a couple of news topics on its front page that are directly related to real estate development on Maui.  That’s a sign that real estate and development on Maui is not stagnant despite the current economic crisis.  Here are some of the highlights today:

Headline: TARGET aims for Maui Store. Trendy retailer Target Corp is looking to open a store on Maui, but it can’t and won’t if the County Council passes a proposal that limits the size of so-called “superstores”.  Read the full article on Maui News. Then come back here and let us know what your thoughts are.  Do you want a TARGET store here even if that means another huge superstore on Maui paradise?

Front Page: A&B  property designated as important ag lands on Maui –  The State Land Use Commission approved on Thursday a request by Alexander & Baldwin to designate more than 27,000 acres on Maui as important agricultural lands. At a glance this sounds like a real good thing. But is there a catch to this?  Read the article on Maui News and then come back here to let us know what you think.

Page 3:  Pukalani Housing Project Wins OK from Land Panel - Pukalani Associates’ Kauhali Lani would develop a 50 acre parcel west of Old Haleakala Highway with new homes, while the 39 acre parcel running along the new Haleakala Highway would be kept as an open area with trails and recreational amenities.  Do you see this as good news?

This is originally posted at Maui News, written by Harry Eagar

WAILUKU – This is the 50th anniversary of interim zoning in the county, and time may at least be running out on this stopgap method of land use control.

But until then, the County Council is ready to tweak the current zoning to at least give it some building standards, which it has never had; and to allow bed-and-breakfast operations in interim zoning.

The council’s Planning Committee voted unanimously Monday to recommend passing the revisions on first reading.

Planning Director Jeff Hunt called the changes “slight revisions” and said he hoped that the next round of revisions to the community plans would extinguish the pesky zoning category.

By putting in some standards, a revised interim zone would, for example, limit the height of cell phone towers, which has been an issue in a few places.

Most of the committee’s discussion concerned adding bed-and-breakfast operations to the list of permitted uses in the interim districts.

Council Member Wayne Nishiki was concerned that such businesses would not pay high enough property taxes.

Since there are no bed-and-breakfasts allowed in interim or rural zones yet, and only 13 in urban zoning, this would depend upon how the Department of Finance treats these uses.

In testimony, Dave DeLeon, the government affairs director of the Realtors Association of Maui, said that in an actual case last year, a bed-and-breakfast’s property was assessed at hotel rates, resulting in payments of five times as much as when the property was considered a single-family home.

Council Member Gladys Baisa pointed out that by applying for a permit, the operator gives up the homeowner deduction, “a very significant” tax break.

The Realtors association supported the change, and there was no testimony against it.

Now that the new bed-and-breakfast ordinance allows this use in the rural and agricultural districts, the extension to interim – as long as not prohibited by language in a particular community plan – seems consistent.

Continued at Maui News

Robert Webber resigned from his position as CEO for Maui Land & Pineapple (NYSE: MLP). He joined the company in 2006 as CFO and Senior Vice President of Business Development. When David Cole stepped down in March of 2008, Webber took the position as President and CEO of the company.

When asked why he was leaving, Webber cited that there is a need to “streamline and clarify leadership” at Maui Land & Pineapple Company and that he would seek other opportunities.

While the search for a new CEO occurs, Warren Haruki (Oahu businessman) has been appointed chairman and CEO by the board of directors.

Excerpt from Maui News:

WAILUKU – The Maui Planning Commission dipped its toes into the rough waters of general land use planning for the next 20 years Tuesday, getting a philosophical overview of the Maui Island Plan from Dave Michaelson of the Planning Department’s Long Range Planning Division.

It’s about more than zoning, Michaelson said.

“You make social decisions about who’s going to be able to stay on this island” when you establish land use policies, he said.

The commission has 180 days to review, refine and send its version of the Maui Island Plan to the County Council. The council will then meld the island plans being reviewed by the Molokai and Lanai planning commissions into an ordinance to manage growth for the next two decades – and, if Michaelson gets his way, for generations to come.

It’s a new approach to planning, he said, citing his mentor, Ian McHarg, and other academic experts behind the “New Urbanism.” And some of the ways the county does business will be changed “radically” if all the ideas in the Maui Island Plan are also endorsed by the commission.

Continued on Maui News

One of the headline this morning when I logged in the internet is the apparent suicide of Mr. David Kellerman, the acting chief financial officer of Freddie Mac.  That is very unfortunate.  It does not have to be this way. Suicide is not yet confirmed – who knows, he could have had a stroke or heart attack. But if it is indeed suicide, I just want to remind everyone that  suicide is never and should never be an answer to a problem no matter how great the problem is.  I thought I should post about it here since it involved Freddie Mac which is directly connected to many real estate and development transactions.

Let’s pray for the family of Mr David Kellermann.  This surely is a hard time …

Below is an excerpt of the news from Yahoo.com

WASHINGTON – David Kellermann, the acting chief financial officer of money-losing mortgage giant Freddie Mac was found dead at his home Wednesday morning in what police said was an apparent suicide.

The Fairfax County police responded to a 911-call at 4:48 a.m. at the suburban Virginia home Kellermann shared with his wife. The police would not release the cause of death or say if a suicide note was found.

Kellermann, 41, lived in Hunter Mill Estates, a well-off neighborhood of large single-family homes with manicured lawns. County records showKellermann’s home is worth about $900,000.  Continued at Yahoo 

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Another news article can be found at LATimes. Click here to go there.