Maui Prince Hotel Facing Foreclosure

by Deidre Woollard (RSS feed)
Sep 2nd 2009 at 3:01AM

The hotel foreclosure shakeout continues with another Hawaii hotel in trouble. The operators of the 310-room Maui Prince Hotel will have to lay off 380 workers when the resort is shut down on September 16. The resort is being foreclosed upon by mortgage holders including Wells Fargo Bank after owners failed to pay the $192.5 million mortgage when it came due in July.

The 310-room beachfront resort offers rooms starting at around $425 a night. It is managed by Prince Resorts Hawaii but is owned by Morgan Stanley real-estate fund and local developers which bought the hotel in 2007 for $575 million (there is a $227.5 million in mezzanine debt being held by a UBS fund plus $250 million in equity that Morgan Stanley and others put into the property).

The resort is located on a white sand beach at the foot of Haleakala on Maui. The entire hotel is built around an Asian meditation garden with stone paths, waterfalls and streams. The hotel is designed so all rooms have at least a partial ocean view. There are 19 luxury suites. The resort is also home to the Makena Golf Course designed by Robert Trent Jones Jr.

Prince Resorts Hawaii has said it will stop managing the resort due to a shortage of funds from the resort's owners and lenders. The company manages three other resorts in Hawaii. Wells Fargo and other lenders have asked a Hawaii state judge to appoint a receiver to be in charge of find a new management company and to administer an escrow account for covering the hotel's costs. No word yet on whether a name change will be required if Prince Resorts is no longer managing the hotel.

UPDATE: According to the Maui News the trustee attorney for the Maui Prince says the hotel will remain open. The Maui Prince recently announced a $99 a night room deal available Sunday through Thursday nights. (thanks, Jeff)

Gallery: Hotels In Transition

Tags: hawaii, hotel foreclosure, HotelForeclosure, hotels, maui prince hotel, MauiPrinceHotel

Filed under: Luxury Travel & Hotels

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marvin neuman Sep 3rd 2009 1:47AM

Hello, I am the owner of Auction America Realty.com I have successfully, this week, sold the Nevele Hotel in Upstate New York. My auction process took 30 days. The sad reality is that many want to stay local and the cost and time of long distance travel, is hurting Hotels around the world. The buyers of the Nevele are going to create a 4-5 star resort which is close to New York, New Jersey, Conn, and Mass. and Canada. Demographics, are the positive for the Catskill region of New York state, and sadly will be the issue in Hawaii, as its pricey and time consuming to get there. I would welcome, hearing that the plan is to auction the hotel, as that is the way to go. Upscale , boutique auction process. Then the purchaser will determine the way the hotel will continue to operate and the plan will keep many employed and the area economics, in good standing. Good luck, to all. Americans are strong and a great people. We American's will figure these hard times out together. Marvin Neuman CEO