Owner Defaults Hawaii Hotel Into Foreclosure

The Sheraton Sea Bay Resort and Spa in Hawaii seems to be facing foreclosure, most of all now that the owner of the resort has defaulted on the hotel’s mortgage, yet another sure sign that Hawaii’s stressed industry of tourism is continually suffering throughout the recession that is going on around the world.
Kenneth Marcus, who was appointed as commissioner by Ronald Ibarra, the Circuit Court Judge, has already confirmed that the hotel would be auctioned off by the end of July of this year.
The owners of Koa Hotel LLC have already defaulted on around $60 million that was remaining within their interest, fines and mortgage. Marcus has also stated that the hotel would currently remain open until further notice. As far as hotel operations go, however, nothing is scheduled to change at all, especially when it comes to outward appearances. When it comes to the terms in the short term run, business will definitely be performed as usual.
Although Marcus could not state exactly what would occur once the hotel has been sold, it seems that it would be likely for somebody to purchase the hotel and then close it thereafter. Currently, Koa Hotel is the property of Brickman Associates, a private equity firm based in New York. The major creditor of the property would be Lehman Brothers Holdings Inc., which has also already filed for complete bankruptcy some time last year.
The business of the resort has declined among a wider and more obvious drop in the overall visitors to the island of Hawaii ever since the spring of year. This year so far, thre are 15% fewer tourists that have come to Hawaii in comparison to the early months of 2008.
Buyers would receive a spa and resort with 521 rooms on around twenty acres of land that was owned by the schools in Kamehameha. The resort also happens to come with three bars and restaurants, a retail place, a spa, a fantasy pool, a fitness center, two tennis courts and a fitness center.
Starting recently, the notice of the sale of foreclosure was already advertised without any set minimum price for the actual auction. Any interested bidders need to register at a minimum of a week before the auction itself and bids must be registered with Marcus. Possible bidders also need to sign an agreement of confidentiality prior to being permitted to see several financial documents.
Then, Marcus will be taking the winning bidder to Ibarra’s court. Here, more bids will be allowed and Ibarra will be the one to actually approve the bid that wins.
As stated within the property tax records of the county, Koa Hotel currently does not owe back taxes whatsoever. In fact, those who hold leases weren’t even in default when it came to payments on lease.
The hotel is located on a lot on the oceanfront, but there is no existing beach. This happens to be a huge problem for the owners of the hotel since it was inconvenient, in the geographical sense, for people who wished to stay longer.
This particular sale of hotel foreclosure will most possibly not be the last one in Hawaii during this economic downturn.

About the Author

Julie Thompson, has been working on BankOwnedProperties.org studying the foreclosures market, helping buyers on the finer points of Hawaii bank owned homes. Try to visit BankOwnedProperties.org and find all related information about bank owned homes listings.

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