Update - April 24, 2008
The Governor's Turtle Bay Advisory Working Group held its fifth meeting on April 24, 2008. Members developed and reviewed various ideas and recommendations to acquire the Turtle Bay property and preserve it for future generations.
LONG-TERM ECONOMIC VIABILITY
Members of the Long-Term Resort Viability Committee released a second report to clarify its earlier recommendations to the group regarding what is needed to ensure that the resort remains a stable source of quality employment for the community. The committee stated that, for the resort to be viable, it must gain and maintain the support of the community, and that the current resort development plan is in trouble primarily because of community opposition to massive expansion.
The committee rejected the idea that a cluster of hotels was necessary for the resort’s viability. Instead, the recent successful marketing of the current single-hotel environment at Turtle Bay as a unique and isolated rural destination proves that it is possible to succeed even through Turtle Bay is not part of a cluster like many other resorts. Turtle Bay’s isolated and rural nature also provides other marketing opportunities, from film shoots to horse tours, and could add cultural, health and eco-tourism linked to the undeveloped land.
The committee concluded, “it is a viable and desirable goal that Turtle Bay Resort remain unique, open, isolated and rural.” The committee recognized, however, “if the cost of acquiring the property made it necessary to permit any further development, that such development should be concentrated exclusively on the existing resort footprint so as not to endanger the open space and shoreline of the surrounding area.”
Furthermore, the committee stated that any development must be acceptable to the community, and that anything other than a carefully limited expansion on the current resort footprint would be met with strong community opposition. View the committee’s report.
ACQUISITION PROGRESS
The Acquisition Options Committee reported that there are many interested potential buyers and that it has engaged in some successful meetings with various entities based on preliminary proposals. The committee emphasized that it was not considering proposals that would build out the resort and was seeking to preserve open space areas. It asked for more input, however, from the community on what kind of modest additional development might be acceptable because the “no build” concept is challenging to interested buyers.
To assist the committee, Samuel Chung of Peninsula Real Estate Advisors was contracted by the State to provide an independent financial analysis of the economic history and long-term economic viability of the Turtle Bay Resort and golf courses. At the April 24 meeting, Chung explained that the owners, Oaktree Capital Management Inc., which is an investment fund not a hotel operator, spent about $55 million for hotel renovations and $7.2 million on the golf courses from 2001 to 2003 to create more aggressive projections of the value of the property. The hotel was not profitable during 2001 to 2004, made a marginal profit in 2005 and showed increased profits from 2006 to 2007.
Chung said Turtle Bay has a many amenities, but that the Hawai‘i hotel and resort market is becoming more competitive. A new owner of the Turtle Bay Resort would need to invest about $30 to $35 million in the future to upgrade the amenities and infrastructure of the hotel and related facilities. Chung indicated that not every company would be able to invest this type of capital, and this would affect the type, number and long-term commitment of potential buyers.
LEGISLATIVE UPDATE
Led by the efforts of Advisory Working Group members Senator Clayton Hee and Representative Michael Magaoay, three bills related to Turtle Bay and supporting voluntary land conservation were approved by the Legislature before the close of the session on May 1.
Acquisition Tools Bill SB2423 SD2 HD2 CD1 expresses the Legislature's support for the Governor's initiative to acquire the Turtle Bay property and provides the negotiations a full range of tools important to successful completion of the process.
Land Conservation Fund Flexibility SB3102 SD2 HD1 CD1 adds flexibility to DLNR's land conservation fund by allowing private moneys to be added and distributed as grants for the acquisition of state conservation lands.
Tax Credit for Land Conservation SB2198 SD2 HD2 CD1 would allow private landowners to obtain a partial tax credit for dedicating their land to conservation purposes, as is done in 12 other states. Supported by many Hawai‘i conservation groups, this approach leverages state and private resources to protect important private lands for public benefit.
TRUST FOR PUBLIC LAND CONTINUES FUNDRAISING CAMPAIGN
Lea Hong, Hawaiian Islands director for the Trust for Public Land, reminded everyone that the organization has launched a major fundraising campaign to raise $5 million to assist in the protection of the Turtle Bay property. By donating, people can help save the area’s wild coastal beaches and landscapes, fishing areas, threatened green sea turtle and endangered monk seal habitat, and Hawaiian ancestral burial grounds.
To donate, visit www.tpl.org/turtlebay. For more information, please contact: Keith Kraughto, Hawaiian Islands Program Development Director, The Trust for Public Land, 212 Merchant Street, Suite 320, Honolulu, HI 96813, (808) 524-8560, keith.kraughto@tpl.org
NEXT MEETING
The next meeting of the Turtle Bay Advisory Working Group is scheduled for Wednesday, May 14, at 10:00 a.m. in the Governor’s conference room at the State Capitol.
