Hokulia sale in the works
A Phoenix- and Sacramento-based real estate investment firm affiliated with the Walton family is in the process of buying Hokulia.
SunChase Holdings purchased the notes for Hokulia’s phases 2 and 3 from Lloyd’s Bank and is planning to buy 52 lots from The Club at Hokulia and the Hokulia Community Association, club General Manager John Shaw confirmed Monday morning.
Phone and email attempts to reach the SunChase principal in the deal, Senior Vice President Duane Grimsman, were unsuccessful Monday.
According to SunChase’s website, the company is “an active real estate developer and manager, with a particular emphasis on master planned communities.”
The company actively seeks out distressed properties, the website said.
SunChase President William Pope is affiliated with the Walton family, of WalMart fame. Shaw said Rob Walton, Sam Walton’s son, is involved with SunChase’s Hokulia purchase. According to Forbes magazine, Rob Walton’s net worth is roughly $23.1 billion.
Shaw said he was “terribly excited” about the upcoming purchase. “SunChase came in and they want to finish off the whole project.”
The sale of the 52 lots from The Club and owner’s association will fund improvements to the amenities there, Shaw said. He expected that sale to close within a month. He did not yet know the final sale price.
One of the biggest issues facing the project for the last several years has been the completion of the Mamalahoa bypass, which the original developer vowed to build from Keauhou to Napoopoo more than a decade ago. Various lawsuits delayed the work, and when Hawaii County called the bonds to get the funding to build the road, the bond holding company fought back. In early 2011, Hawaii County and the bond company reached an agreement that gave Hawaii County $12.5 million in cash and a $20 million promissory note, secured in property. The developer, 1250 Oceanside, must pay the county $20 million within two years of the settlement, reached in February 2011, or give the county the land, to fund building the road, which is expected to cost about $27 million.
Corporation Counsel Lincoln Ashida said a new buyer would still be subject to the original development agreement.
“Somebody’s got to build it,” Ashida said. “To me, that runs with the entire project. (Selling the land) doesn’t relieve them from the responsibility.”
Shaw, who is not directly involved in the broader Hokulia sale, said he did not know what steps SunChase would need to take to acquire title for the remaining two development phases.
Lots in Hokulia were once listed as high as $5 million apiece and about six years ago, those lots routinely sold for $1 million or more. Last year, lots were listed about $500,000. But 1250 Oceanside couldn’t sell anything because it could not make the necessary legal disclosures, former CEO John De Fries told West Hawaii Today in July 2011.
Arizona-based developer Lyle Anderson gambled on the West Hawaii property in the early 1990s, with what was then to be called The Villages at Hokukano. The resort’s developers had grand visions of hundreds of upscale homes, a golf course and clubhouse, beach club, spa, a pair of boats, tennis courts — all the amenities expected of a luxury resort.
But lawsuits — lots of them — and the recent recession stopped development and eventually led to the company declaring bankruptcy. In January 2008, a U.K. bank foreclosed on the developer’s $1 billion debt.
The county’s initial attempt to condemn land for the Mamalahoa bypass road ended in a lawsuit filed by the Coupe family that spent years in court. The Coupes then argued the county’s eminent domain action was illegal because it would benefit a private company. The condemnation was later upheld.
In another case, Hokulia, the county and then-county Planning Director Chris Yuen were also sued by a group of Kona residents over water pollution, planning and land use concerns, Native Hawaiian remains and other issues. That case was settled in 2006. According to at least one plaintiff in that case, fulfilment of those settlement terms by the county and developer remains outstanding.