Lingle says state should buy Turtle Bay
Hawaii Gov. Linda Lingle on Tuesday proposed that the state buy the Turtle Bay property on Oahu's North Shore to protect it from further development.
The Republican governor said Hawaii has a "once in a lifetime chance" to purchase the 850-acre hotel, condominium and resort property in order to preserve the area's rural lifestyle.
Lingle did not reveal details of the plan. But she said acquisition of the property could be patterened on similar collaborations between government, nonprofit groups and the private sector that led to the preservation of Waimea Valley and Pupukea-Paumalu, also located on the North Shore.
Turtle Bay Hotel owner Kuilima Resort Co., which is owned by Los Angeles-based Oaktree Capital Management, had planned to build an additional 3,500 units on its oceanfront property, which was first developed in the early 1970s. Oaktree bought Turtle Bay in 1998 and has spent at least $60 million refreshing the hotel.
The proposal has pitted North Shore residents against one another, with some welcoming the influx of new jobs and others worried about increased traffic and environmental degradation.
Last month, a $283 million mortgage foreclosure lawsuit was filed in Honolulu against Kuilima by Credit Suisse, an international lender seeking delinquent principal and interest payments.
Kuilima Resort Co. issued a statement late Tuesday in response to Lingle's proposal: "We were surprised to learn about the governor's proposal to purchase Turtle Bay Resort in her speech this morning. This was the first time that we heard about her proposal and would have welcomed the opportunity to discuss our situation with her.
"As always, we are very open to meeting with the governor and discussing the project with her. In the meantime, we continue to move forward in working with the lenders to try to amicably resolve our foreclosure action. We are continuing to move forward with the development of the resort as planned and the hotel operations are continuing as usual.
In her sixth state-of-the-state address, Lingle also proposed the creation of a state Commission on Higher Education, a partnership with the U.S. Department of Energy called the Hawaii Clean Energy Initiative, funding for innovation in educational programs, and using $100 million from the state retirement fund to invest in local companies.
The 443-room hotel would likely carry a pricetag of $120 million to $150 million with the two golf courses worth another $30 to $40 million.
But the real cost of acquiring Turtle Bay is the value held by the undeveloped beachfront land that surrounds it, which could be well over $200 million.
The text of Lingle's speech is available at www.hawaii.gov/gov.