Makena Resort has just one owner
Ares Management acquires that final 3 percent it didn’t already possess
Asset manager Ares Management has become the sole owner of the 1,800-acre Makena Resort, scooping up the final 3 percent stake and consolidating its holdings in subsidiary AREG AC Makena Propco LLC in December, filings with the state Public Utilities Commission showed.
The corporation was part of an ownership group that sold The Ritz-Carlton, Kapalua, to Blackstone Real Estate Partners for a reported $275 million in a deal announced in October. Formed in 1997 with 18 offices in the U.S., Europe, Asia and Australia, Ares Management is a Los Angeles-based, publicly traded company with about $125 billion of assets under management as of Sept. 30, the company said. It closed at $20.80 a share Friday on the New York Stock Exchange.
The major projects ongoing at the Makena Resort planned community include a private beachfront community and club on the 24-acre site of the old 310-room Makena Beach & Golf Resort and a 134-unit mixed-use project on 47 acres.
The latter $354.5 million project received its special management area permit from the Maui Planning Commission in July 2017 in a compromise hammered out following a lawsuit filed against the project. It includes 67 multifamily units, 18 single-family cottages, 26 single-family custom lots, nine transient vacation rentals and 14 condominiums. The project also allows for 27,300 square feet of commercial space.
The other project, the Makena Golf & Beach Club, with a $240 million price tag, turns the old hotel into 50 private residences, developers say. The demolition of the hotel, also once known as the Maui Prince Hotel, has been completed, according to the PUC filing. Work has begun on the new concept, which will include what was formerly referred to as the Makena Golf Clubhouse area and Makena Tennis Complex.
The attached sales contract showed that the developers hold 99 workforce housing credits.
Ares Management through its investment vehicles AREFIN USI and AREG ATC Makena Holdings, which included administrative member Trinity Maui, had owned and controlled about 97 percent interest in the Makena Resort.
Following the completion of the transaction on Dec. 14, Ares Management through its investment vehicle AREG AC Makena Holdings, which is the parent company of AREG AC Makena Propco, “now owns and controls 100 percent of the Makena Resort,” the PUC filing said.
In this complicated ownership web, there is another close connection between Ares and Trinity. Trinity CEO and President Sean Hehir has partnered with Lee Neibart, a partner in Ares Real Estate Group, to form Trinity Merger Corp., which plans to focus on business combination candidates, Pacific Business News reported in May. The company had a public offering, which raised $345 million.
An accompanying filing of portions of the purchase contract with the PUC had the transaction price details redacted.
The details of the transaction ended up in the PUC because ATC Makena Holdings subsidiary ATC Makena WWTP provides wastewater treatment services to the future Makena Golf & Beach Club, administrative offices for the developer, six third-party residential units, the Keawala’i Church, and a comfort station in a county park in Makena.
Because of the ownership transfer, the PUC has to approve the transaction. It is the final piece of the sales agreement, the PUC filings Jan. 17 say.
The wastewater subsidiary says in its filings that operations will not be affected by the transaction involving its parent company and that a third-party contractor will continue to operate the facilities.
Aqua Engineers Inc. ran the facilities from 2011 to 2018. In late 2018, the contract with Aqua Engineers was terminated and a new operations-and-maintenance contract was awarded to Water Techtonics Inc., a Washington corporation, the filings said.
Rates will not be affected, the filings say, and there will be no “acquisition premium” levied due to the sale.
* Lee Imada can be reached at email@example.com.