It was a real estate shocker. In August, Maui developer Everett Dowling and Morgan Stanley Real Estate defaulted on the $575 million loan the investors took out just two years prior to create a massive resort, golf, spa and luxury housing development on 1,800 secluded oceanfront acres in Makena.
It appeared as though the Maui Prince Hotel and Dowling's ambitious plans to build his overarching "Maui Resort" project were finished.
However, a state judge appointed a receiver at the request of the mortgage lenders' trustee, Wells Fargo Bank, and the hotel and most of its 300-plus employees were saved. A month later, the Maui Prince reopened under new management, Benchmark Hospitality International, as the Makena Beach and Golf Resort.
Dowling blamed the poor international economy and stingy banks for the loan default. Pre-sales of hundreds of new homes and condos were supposed to help finance this complicated development deal, he said.
Dowling reportedly had invested another roughly $200 million on designs, new Maui County zoning and clearing the property and installing new infrastructure in order to replace the 24-year-old hotel and construct the homes.
The resort's demise also killed accessory plans for hundreds of new affordable homes in the Kihei-Makena Community Planning District.
Dowling has promised to again be involved in the deal before 2010 is out. However, Wells Fargo has said it plans to sell off the property at auction in the coming months to the highest bidder.
