Friday, May 29, 2009

Poipu Development - Kukui'ula Update

Wednesday, May 27, 2009, 7:53am HAST | Modified: Wednesday, May 27, 2009, 12:00pm
A&B increases ownership at Kauai development
Pacific Business News (Honolulu)

Alexander & Baldwin is increasing its ownership stake in Kukuiula, a luxury golf and vacation home development under construction on the south shore of Kauai.

The company (NYSE: ALEX), through its subsidiary KDC, LLC, and DMB Associates, the company’s co-developer at Kukuiula, will collectively invest $165 million over the next three years to finish the recreational amenities at the luxury home development just outside Koloa.

The 18-hole Tom Weiskopf championship golf course, resident club, restaurant, golf clubhouse and spa are scheduled to be completed by the end of 2010. The recession has slowed vacation home and lot sales to a trickle and in A&B's most recent quarterly report, filed May 5, it said the company "has very modest expectations of residential unit sales for the coming year."

While A&B didn't say why it was increasing its stake, its Scottsdale, Ariz-based partner is clearly under financial pressure because of the real estate meltdown, which has hit Arizona especially hard.

“The original vision for Kauai’s ‘Living Garden’ continues to be realized,” said Stanley Kuriyama, president of Alexander & Baldwin, in a statement. “This new opportunity to invest strengthens our partnership with DMB, and importantly allows us to complete our resort amenities and continue to move forward with the entire project, while building long-term value at Kukuiula. By increasing our ownership and investment in the project, A&B also reinforces its long-standing commitment to Hawaii and to the residents of Kauai. This investment allows for the completion of what we believe will truly be one of Hawaii’s outstanding resort communities, and will position us to capture rising buyer demand as the economy and real estate markets recover.”