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)