Greetings and Salutations from
JACKSON & COMPANY
Still loving and living Polo after all these years…
Aloha to all,
Is no news good
news? If so, please think of this as an update, rather than
a long- overdue newsletter. We do have lots to report, and
much of it good.
In February we were
spared the trauma of a significant tsunami event. After
waiting anxiously for hours, eyes glued to local newscasts
from Hilo on the Big Island, we eventually observed a series
of small surges. That was it. No injuries or damages
reported. The alert came almost twelve hours before the
anticipated arrival, and island communities were quick to
prepare. It was reassuring that we were not required to
evacuate Polo. Many here were busy removing lanai furniture
from lower levels, and running cars from our parking garage
up to Mulligan’s. Your Polo community in action!
Although national
and international headlines about the economic morass
continue to discourage, we do see some signs of optimism
here on Maui. Alaska Airlines has added more direct flights
direct from California to Kahului, departing from Sacramento
and San Diego. Hawaiian Airlines has also added more
flights, as well as Canadian carriers WestJet and Air
Canada.
This last March, Maui led all
other islands in visitor arrivals and tourist spending. Our
island hotels enjoyed an 18.1 percent jump in revenue per
available room this July. That’s a big improvement over July
of 2008, when the slump was gaining momentum. This July the
visitor count was 11.6 percent higher than last July, and
August 2010 was up 10.1% from the “09” figures. Visitor
spending on Maui rose 29.6%, to $268 million.
Whole Foods Market opened in
Kahului. This is definitely not what you’d consider bargain
shopping, but the selection and quality of goods is superb.
The parking lots are still packed these eight or so months
after the Grand Opening. Plans are on course for a new
police station in South Maui, and $8 million was granted to
purchase 77 acres of ranch land for the proposed
1,600-student Kihei high school. The school will be mauka
the Piilani Highway in North Kihei.
In July economist
Paul Brewbaker, of TZ Economics, delivered the news to Maui
Realtors that the great recession is over, and “We are right
at the moment of breakout.” How’s that for good news? He
suggests people need to “get over this idea of waiting for
the best deal.” He says “2012 is not a year worth waiting
for.” Although prices may not go up, financing may be more
costly.
Early September at
the 36th Annual Maui County Business Outlook
Forum, two of Hawaii’s leading economists delivered an
upbeat message, though more guardedly optimistic than Mr.
Brewbaker’s perceptions. Dr. Leroy Laney and Dr. Jack
Suyderhoud both affirmed the local economy is improving, but
“times are far from good.” In the year 2010, the “bottom has
emerged.” There are signs of hope, but we aren’t yet free
and clear. But of all the islands, Maui is distinguished by
an impressive rebound in tourism.
Though hard to
understand how “the great recession” could possibly be over,
sales activity has definitely picked up in our
neighborhood.
Makena Surf
There was one sale
at this property in 2009. This year three closings have
occurred. The two-bedroom sales were at $1,999,950 and
$2,475,000. A three-bedroom unit sold for $3,375,000. The
five active listings range in price from $2,345,000 to
$2,990,000.
Wailea Point
The year 2009 was
slow here as well, with just a single sale in late December.
However, five more have recorded in 2010, with an extreme
range in sales prices: From $1,550,000 to $9,999,999. There
are currently six active two- and three-bedroom listings,
from $1,900,000 to $5,100,000.
Wailea Beach Villas
Evidently no one at
WBV got the news that times have been tough. There were six
two- and three-bedroom unit sales in 2009, and 2010 has been
even busier. Seven sales have recorded so far this year.
Here is another wide range in sales prices: From $2,296,000
to $12,500,000. Prices for the eight active listings are
from $2,325,000 to $5,490,000.
Wailea Elua
There were no
two-bedroom sales reported in 2009, but one sold in March of
this year for $1,400,000. Two more are currently listed: One
at $1,788,000 and another at a very optimistic price of
$3,850,000.
Polo Beach
Our 2009 Polo sales
report was likewise lackluster. In June of this year, we
closed Unit 701 at $1,850,000. Unit 802 is in currently in
escrow, due to close early October. We’ll be enthused to
disclose the sales price just as soon as we can. Right now
five Polo’s are listed: Unit 109 for $2,100,000; Unit 108
for $2,195,000; Unit 207 for $2,250,000; Unit 308 for
$2,250,000 and Unit 801 for $2,999,999.
Ho’olei
This imposing
120-unit resort property is located up the slope across the
Alanui from the Grand Wailea. Although not on the beach,
Ho’olei definitely has a presence in, and an impact on, our
neighborhood. There have been 28 sales since the beginning
of 2009. Prices ranged from $1,640,000 to $2,500,000. There
are 16 more for sale right now, listed from $1,895,000 to
$3,100,000. The two-level, three-bedroom units are large,
3,000-plus square feet, with elevators, private garage, full
gym and privileges at the Grand. Ho’olei has absorbed a
large resource of high-end buyers willing to sacrifice
location for what their dollars can purchase in terms of
luxury and square footage.
A broader view of
South Maui shows us overall condominium sales volume has
increased 52% to date over the same period in 2009. In the
specific Wailea/Makena area, volume was up 84%.
Prestigious Old Makena Road!
One of the basic
tenets of real estate has always been “Location, Location,
Location.” We’ve got that in aces. Another favorite is:
“It’s best to own one of the less expensive homes in the
most expensive neighborhood.” Well, friends, I think we’re
nicely positioned for this one also. Polo is the first
official Makena address on this street. Just a few homes
down the road, where Palauea Beach starts, the erstwhile Von
Tempski estate (re)sold in April for $19,850,000. Late May a
newer home perched above the other end of the beach closed
at $17,500,000. There goes the neighborhood.
A legacy from Ulupalakua:
That glimpse of the
ranchland behind Polo, visible from our pool, the beach or
ocean, has always been precious; usually green, often misty,
and always pleasing. Now it will be, for always. Ulupalakua
owner Pardee Urdman granted an historic donation easement to
the Maui Costal Land Trust of almost two-thirds of the
18,000 acre ranch, upslope of Makena. This was the largest
deal of its kind in Hawaii history, precluding future
generations from selling off the land to developers.
Almost 12,000 acres will be
forever preserved as a working ranch and wildlife habitat,
with potential for future farming opportunities and
green-energy initiatives. Some of the land has already been
leased to Sempra Energy, for a 12- to 15-turbine, 20-megawat
wind farm. About 30 acres of native forest has been restored
since 1997, and work will begin on another 100 acres soon.
In addition to about 5,000 head of cattle, the ranch
supports elk, lamb and goat herds. There is a winery, a
country store & grill plus horseback riding and clay
shooting. It is absolutely beautiful up there. Just ask
Oprah. She purchased 1,000 acres right next door.
Down by the seashore:
Financial struggles
are not specific to first-time homebuyers with mortgage
woes. The prestigious Four Seasons Resort is reportedly
having trouble keeping up the payments. Texas computer
billionaire Michael Dell purchased the property in 2004 via
his investment vehicle, MSD Capital L.P., for $280 million.
In 2006, when interest rates were very low, MSD took out two
mortgages on the property totaling $425 million. Things were
still rolling in 2007, when the Four Season’s net cash flow
was $32.9 million. By the fourth quarter of 2009 it had
dropped to $10.9 million. The hotel needs to bring in $23.6
million just to pay the interest. MSD covered the shortfall
until February, 2010, but has since declined to advance more
cash to cover the notes. Apparently MDS is working with the
creditors to rewrite the terms of the loan. Meanwhile, the
Four Seasons recently added a $9 million pool, maintained 70
– 80% occupancy during the first quarter of this year, and
as yet has excused no hotel employees.
Many other Hawaii
resorts are restructuring, one way or another, but those
owned by private companies do not have to reveal whether or
not they are current on their debt. The Ritz Carlton,
Kapalua is reported many months overdue on a $300 million
note. Hotel Wailea, once known as the Diamond Resort just up
the hill, is currently embroiled in a complex foreclosure
proceeding. Original ownership was dispersed among 1,400
Japanese investors/members. In 2008 a group of Honolulu
businessmen attempted to revive the tired, two-decades-old
property. This required consolidating ownership, an attempt
which generated countless lawsuits from original purchasers.
Now it looks like the would-be rehabilitators and the
challengers will all end up with zilch. A mainland lender
foreclosed, and has asked to bid the debt at the foreclosure
auction. No date has been publicized as yet.
Here’s an exercise
in irony: In October 2009, the Grand Wailea received a
Special Management Area Permit for a $250 million expansion
that would add 310 additional rooms, and provide a suffering
construction industry with many needed jobs. The goal was to
position the hotel for the future, when tourism picks up –
what a positive and bold approach! Then this front page
headline appears early December: Foreclosure Still Looms
for Grand Wailea. What? We were all under the impression
that the Grand was doing better than most during the slump.
Turns out the hotel was pledged as collateral for an
underperforming loan. Debtors are asking for a
restructuring, and the $1 billion loan will likely be
renegotiated before it comes due February, 2011.
Meanwhile, the SMA Permit for
the $250 million expansion has been voided, at least for
now. A Maui judge ruled the Planning Commission erred by
denying intervention by two petitioners. Interveners are
property owners at Ho’olei and Dana Naone Hall, who raised
concerns about Native Hawaiian burials in areas of the
property slated for expansion.
Makena Goes South
This is no joke.
We‘ve all been following the troubles of Everett Dowling’s
grand master plan for the Makena Resort with much dismay. It
was big news when Dowling and partners purchased the
1,800-acre resort back in 2007 for $565 million. They spent
an additional $100 million on improvements, and acquired
entitlements for residential development on 1,300 acres. The
permit process was long and arduous. The master plan was
cohesive and LEED certified, using clean energy and new
technologies to conserve natural resources. When
Dowling-Morgan Stanley interests became trapped by the
collapse of international financial and real estate markets,
they defaulted on a basic loan of $195 million. Makena
Resort went to auction.
The new owners are
AREA Property Partners in a joint venture with Trinity
Investments and Stanford Carr Development LLC. AREA is an
international firm which has overseen the establishment of
multiple real estate funds and joint ventures totaling 13
billion. Chuck Sweeney is the co-chairman of Trinity. Most
will recall he developed the Embassy Suites in Kaanapali and
the Kea Lani Hotel. Stanford Carr is a Maui native whose
recent work includes Olena, the Cottages and the Villas, all
at Kehalani (these are the residential subdivisions up the
hill on the left as you head towards Wailuku town on the
Honoapiilani Highway – the high road).
These owners are
backing away from the “uber-luxury” concept that Dowling
envisioned. Proposals will include work force housing within
the resort – a first for Maui. The old Prince Hotel, now
called the Makena Beach and Golf Resort, will remain
standing and stay open. A Trinity spokesman said “There is a
strong need for a hotel in the $200 to $250 [per night]
range in that part of the island” Some parts of the hotel
will be “refreshed” and there are plans to reopen at least
nine holes of the South Course. New development proposals
should come before the County sometime next year.
Ecological Issues...
Any of you swimmers
must have noticed the drastic decline in our fish
population. It’s pretty spare out there. The aquarium fish
trade is big business, and there is no regulation in these
islands. Many of our representatives and senators have
voiced opposition to reef fish extraction. Robert Wintner
(aka Snorkel Bob) feels regulation has been stonewalled by
current administration and the House Leadership. For years
the Department of Land & natural Resources has declined
responsibility. According to Bob, the current governor’s
chief policy adviser is a former wholesaler to the aquarium
trade. Maui Council members decided to take action at the
County level. In a unanimous vote (and there aren’t many of
those in our Council) they gave approval to a bill aimed at
protecting the fragile marine environment. People who
collect fish for sale would require a County license and
accurate reporting methods. It is estimated that actual
aquarium catch is two to five times greater than the
reported catch. If signed, citations will be issued to
violators, effective next January 1st.
In a related reef
recovery concern, the Ahihi-Kinau Natural Area Reserve will
remain closed for another two years. We used to love hiking
across the lava out to the “Aquarium” and “Fishbowl.”
However, guidebook publicity generated too much interest,
and visitors began arriving in droves. The area is
technically a reserve, set aside to provide habitat, refuge
and breeding ground for wildlife – not a park set up for
recreation. The Board of Land and Natural Resources will
complete a draft management for Ahihi-Kinau over the next
two years. Gratifying improvement has been observed in the
geological, cultural, and especially in the marine
resources, in the more remote and sensitive areas. The
northern part of the reserve and the coastal area along the
Ahihi Bay near “Dumps” surfing spot will continue to be open
to the public. Anyone entering the closed portions can be
arrested and fined up to $1,000 or spend a year in jail.
One of the better
ocean swimmers from Polo recently participated in the Blue
Aina Beach & Reef Cleanup sponsored by Surfrider Foundation.
The Trilogy crew takes members and volunteers to different
locations the first weekend of each month. They retrieve
fishing line, clean mooring lines; remove rubbish and nets
from the reef and beach. What a great way to participate in
preserving the purity of our greatest resource. For more
information call Jill Q. at 808-333-7368 or email
jill.qu@gmail.com.
And Extraterrestrial Data from
Haleakala
A new telescope
atop Haleakala is surveying the skies, looking for killer
asteroids. The new addition was designed and built at the
University of Hawaii at Manoa. In the next three years
astronomers are expected to discover about 100,000 asteroids
and determine if any of them are on a collision course with
earth. Very well! About 5 billion stars and 500 million
galaxies will be cataloged, and a digital map compiled of
the 75% of the universe visible from Hawaii. Amazing…
You can fight city hall!
Or at least reason
with the County Council. Earlier this year the Council
presented a bill to tax all properties at their highest and
best use. All other property categories are taxed in this
manner. For instance: A property owner in Kula who has been
unable to build a home for 12 years because water meters are
not available still has to pay the same property tax for an
empty lot as the neighbor with a residence.
Only the
condominium category has been taxed according to actual use,
rather than the highest and best use based on the zoning.
Resident homeowners get the best rate: $2.50 per
annually-assessed $1,000 of valuation. Owners who rent for
six months or longer, or who use their condo as a second
home, pay an “Apartment” rate of $5.00 per assessed $1,000.
Owners who use their condo as a vacation rental pay the
“Hotel & Resort” rate of $8.30. The zoning for Polo Beach
and Wailea Point is “Hotel Resort.” Many owners at Polo do
not rent; there are only a handful of renting owners at the
Point. Had it gone forward, this bill would have increased
non-renting owner’s property taxes by 60%.
Many homeowners in “Hotel
Resort” properties rent on a long-term basis, so have been
able to claim the “Apartment” rate. There is a big demand
for long term rentals in this market where foreclosures are
more and more common. A big increase in the tax would have
been passed on to renters, creating additional hardship.
The Council claimed
this was a matter of fairness, and all properties should be
taxed equally. However, the underlying issue was the large
and unaccounted number of owners claiming to qualify for the
“Apartment” rate, while continuing to host short-term
rentals. There were long and vocal meetings. There was
eloquent testimony from all quarters, including your manager
and a fellow homeowner. A compromise was reached. The
amended bill requires condo associations to “self police,”
and file annual reports on how owners are using their units:
personal residence, vacation rental, or second
home/long-term rental. The three-level taxation practice
will remain in effect. However, any owner who purposely
falsifies a declaration, and is discovered, may subject the
entire property to an across-the-board “highest and best
use” tax.
Tax classification
can be altered just once yearly. It you do not use your Polo
unit for short term rentals, it’s a good time to check your
property tax figure to be certain you are not paying the
higher rate. Notice of classification change must be
delivered to the County by December 31st. It is a
simple procedure, and can be accomplished on line. Any
adjustments will appear on the July 2011 tax bill.
What’s for dinner?
Many restaurants
are offering special discounts to lure more of us out to
dinner. Here are some of our favorites:
Four Seasons Duo: $49
for a three course meal (appetizer, entr�e, dessert). Any
night of the week, any time, no local ID required.
Four Seasons Spago: $49
for the a similar menu, but with time restrictions.
Available 5:30 – 6 PM and 8:45 – 9:30 PM. Everyone welcome.
Mala at the Marriott:
Prefixed menu for $43 includes soup, or Farmer’s Salad,
choice of three entrees (herbed mahi, teriyaki chicken,
blackened rib eye with rice, potato, veggie) plus dessert.
If you like to dine late and have local ID, make
reservations for after 8 PM for 50% off on all food. Do note
that a gratuity of 18% will be charged.
Capische?: Local ID
required for this – purchase one entr�e and get 50% off the
second.
Ko at the Kea Lani:
Enjoy an appetizer, entr�e and dessert for $39. Reservations
recommended no ID necessary.
Tommy Bahama: 50% off on
pu pu menu and drinks, from 4 – 6 PM and 9PM ‘til closing.
Offered to all – no ID’s.
Longhi’s: Sunset Dinner
is served from 5 – 6:30 PM. For $39.99 enjoy salad, pasta,
an entr�e and tiramisu for dessert. Offered to all.
Ruth’s Chris: Primetime
served from 5 – 6 PM. Appetizer/entr�e/dessert for $$39.95.
No ID’s necessary.
Waterfront: In honor of
the proprietor’s 20th year anniversary, everyone
on island is invited to this celebration. Buy one entr�e;
the second entr�e of equal or lesser value will be
complimentary, from now until the end of November.
Gannon’s: If you want to
get happy between the hours of 3 -7 PM, all items on the bar
menu are one-half price. Sunsets are free.
Joe’s: Place your order
before 6:30 PM. The first entr�e is full price; the second
of equal or lesser value is free of charge. Sunsets here are
pretty nice as well.
Any golfers out there?
Hawaii is a
golfer’s state, and the junior golf sector is in the
limelight right now. Baldwin High school senior Cassy
Isagawa represented Maui at the Junior Ryder Cup last week
in Scotland, and played a significant part in helping the
U.S. take the cup. Among other honors, she was with Team
Hawaii, winning the Girls Junior America’s Cup at Rancho
Santa Fe, California, last July.
Team Hawaii had a
very special coach. Cathy Torchiana was Head Coach of the
USC Trojan Women’s golf team for many years, before landing
on Maui for keeps. She’s in the NCAA Golf Coach’s Hall of
Fame, and one of only 52 women to achieve Life Membership in
the LPGA Teaching and Club Professional Division. Since
1996, along with volunteering time and heart to coach junior
golf and serve as vice president of HSJGA (Hawaii State
Junior Golf Association), she’s been a teaching pro at
Wailea Gold & Emerald Course. Aside from all these kudos,
she is a kick in the pants. If you decide to try a lesson
with her, it’s a promise you will never have more fun or
learn more. You have to call her directly: 808-879-4538. If
you tell her you called after reading this letter, she will
add 15 free minutes of instruction to your first get
together. By the way, this offer extends to all you golf
students who have already enjoyed the Cathy experience.
The wind up:
Hawaii was ranked
second-happiest place in America. Louisiana placed first,
but the study was completed before the recent oil spill
disaster. Apparently, people in sunny, outdoorsy states rate
highest on the happy scale. So moved, and seconded. Lastly,
be advised: No more hands-on cell phone use allowed if
behind the steering wheel on Maui.
With aloha, from the Jacksons -
October, 2010
*
Information deemed reliable but not guaranteed.
New Maui Tidbits, many are courtesy of Phylleen Jackson
Jackson and Associates 808 874 1336
A
PLUS RESORTS - for