MAKAHA -- A local developer who wanted to breathe new life into the
former Sheraton Makaha hotel, which is closed, backed away from a
plan to buy the Oahu property from ANA Hotels Hawaii.
Ko Olina Partners president Jeffrey Stone said his company
decided not to buy the hotel and the Makaha Golf Club after
learning about $6 million in improvements that the owner of the
property would be required by the city to make to the surrounding
The Sheraton Makaha has been closed for the last five years. ANA
Hotels, a subsidiary of All Nippon Airways of Japan, has kept the
golf course open during this time.
ANA Hotels Hawaii vice president Millie Takesue said the hotel
and golf course are still for sale and the company is talking to
other interested parties.
The hotel and golf course are worth $10 million to $12 million,
according to local sources familiar with the property.
Stone said he backed away from buying the property because of
improvements required by the city attached to its sale.
"There are some promises to the community that ANA made that
still need to be worked out," said Stone. "We think it's [ANA's]
obligation to work out the promises."
A 1991 agreement between ANA and Honolulu required the owners of
the property to widen and repave local roads, add street lights and
traffic signals and build 45 units of affordable housing before
making additions to the property.
At that time, ANA wanted to add 360 new rooms to the resort's
original 200 as well as add a conference facility, condominiums, a
health spa, tennis courts and retail space.
But ANA never went through with its enhancement of the property
and never made the improvements to the local area.
Stone said those improvement requirements would most likely be
his responsibility if he bought the property and would cost too
"They're willing to sell it, but I think they are going to talk
to other people," said Stone.
In the meantime, a Honolulu city councilman introduced a measure
to change the zoning of the property from resort to
If this goes through, any new owner of the property would have
to get the zoning changed back to resort, and local improvements
would likely be a condition of getting the zoning change.
Stone previously said that if his company did buy the Makaha
property, "there is no question that Marriott would be the manager
for the golf course, and we would talk to them about managing the
Stone brought in Marriott to manage the nearby Ihilani hotel at
the Ko Olina resort, which his company bought in October.
In that transaction, Ko Olina Partners and Mass Mutual insurance
company bought the 387-room Ihilani Resort & Spa from Japan
Since both the Ko Olina and the Makaha property are on the same
side of Oahu, Stone had plans to have both resorts complement each
other's guest amenities, such as golf.
Local hotel broker and consultant Ron Gilligan of R.F. Gilligan
Realty in Honolulu said the 200-room hotel at Makaha is in
relatively good shape after sitting for five years. "You could
salvage 150 units of the 200," said Gilligan.
The real asset, though, is golf, Gilligan added.
A second hurdle for any company looking to buy the Makaha
property will be the perception that the area is dangerous, said
The Waianae Coast, where the property is located, differs from
the rest of Oahu in two ways: Its appearance more resembles the
Baja Peninsula in Mexico than the typical tropical image many
people have of Hawaii, and it is somewhat more economically
depressed than the rest of the island.
Visitors coming from the airport to the town of Makaha on the
Waianae Coast must drive a 20-mile stretch through an economically
depressed area where tourists sometimes get a chilly reception from
"The first stage will be to clean up the impression that the
west side of the island is unsafe," Stone said when his company
first began negotiating the purchase of the Makaha property.
"It's not unsafe. Yes, that coast has some depressed areas, but
it's no different than any other place. The important part is you
really have to have community support."
Stone said the Waianae Coast might have suffered some image
damage from robberies that took place on golf courses in the
And he said staff at hotels in Waikiki, about an
hour-and-15-minute drive from the Makaha property, are said to show
visitors a map of the island, point out the beginning of the
Waianae Coast and discourage guests from visiting the area.