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
Maui Land and Pineapple Company Exempt from Water Rule.
The case is the first time a challenge to the 2007 law has been tested. The so-called “Show Me the Water” ordinance requires landowners to prove they have a long-term source of quality water that can meet the needs of their proposed projects. The requirement is triggered when a landowner applies to subdivide a property. But the law allows a number of exemptions, including an exemption for large-lot subdivisions where no water will be required. Continued at Maui News
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