Amidst Foreclosures: Another Hotel Closes Down in Hawaii

The US economy is on a tailspin what with the Recession claiming jobs. As unemployment reaches its zenith, people are unable to make the mortgage payments. Hence, banks are taking over homes and have reached a record high. The wave of foreclosures, so far, restricted to homes is now taking commercial properties in their sweep as well.

Take, for instance, Maui Prince Hotel in . Prince Resorts has planned to terminate the contract and close down the hotel. The Makena North golf course will also be closed down.

Even the staff of 380 has been notified that the golf course and the resort hotel will be closed on September 16. The statement was given by Prince Resorts Hawaii. Wells Fargo, the lenders, filed a foreclosure against the resort for non-payment of dues amounting to $192.5 million. The hotel owners have been unable to pay the stipulated amount.

Everett Dowling and Morgan Stanley had bought the hotel along with the 1,800-acre resort in 2007. They coughed up an amount of $575 million. Dowling refused to make any comment on the sale. It was not possible for the lenders to abide by the funding terms. Initially the owners did not want to close down the golf course and the hotel.

The operator of the hotel, Maui Prince Hotel LLC, has been holding talks with Wells Fargo to finance the payroll and the accounts payable of the hotel. True, it was the responsibility of the owners but they were not in a position to pay for that.

It will not be possible for Maui Prince Hotel LLC to run the hotel unless they received the assurance that both the operating expenses and the payroll will be made available to them. Prince Resorts Hawaii President Donn Takahashi said that August 28 was the deadline for receiving assurance that the accounts payable and the payroll would be taken care of. Without the necessary funds, it was not possible for the operator to move forward.

On the other hand, the lenders, Wells Fargo will be taking steps to open the hotel. A receiver will be asked to take over the resort’s operation. Then the operation will be made over to another company. Even employees would be given 60 days’ severance as applicable under state law. The state Department of Labor and Industrial Relations said that efforts are also on to help the workers who have lost jobs.

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