Governor's Turtle Bay working group update

RESORT VIABILITY

Assuring the long-term economic viability of the existing Turtle Bay Resort and stability of its workforce are critically important. Up to 700 employees work and support the resort, the largest employer on the North Shore and an economic engine for sustained prosperity of that community. The resort must be able to generate sufficient, dependable revenue for its owners and operators to remain in business.

At the April 2 meeting, the Long-Term Resort Viability Committee presented a report identifying the elements necessary for the success of new ownership. The committee report highlighted that the undeveloped environment surrounding the resort, its isolation from other tourist facilities, and the rural lifestyle of the North Shore are currently being used to successfully market the resort and maintain high occupancy rates.

The committee proposed that any new development on the property necessary for economic viability be restricted to the existing footprint and not develop the remaining open space. The committee also identified other key criteria to be considered in acquisition, including protection for public access to the shoreline, the importance of the mauka lands for agricultural uses and existing water and sewage facilities, the potential for renewable energy projects, the need to upgrade facilities to "green" standards, and utilizing the unique natural assets of the area in future marketing for the resort (e.g., ecotourism, film industry, wellness, golf).

The committee concluded that, although a limited expansion of the existing resort campus in the currently developed area may be necessary to maintain viability and quality employment, community support for a new plan is necessary as well. The full committee report is posted at www.hawaii.gov/gov/turtlebay


ACQUISITION PROGRESS

Potential buyers continue to contact the State of Hawai'i and the Acquisition Committee to explore options for purchasing developed components of the property. With the assistance of an appraiser contracted by the State, the committee is identifying the possible price ranges for pieces such as the resort, golf course, mauka lands and other businesses. Also underway is an economic sustainability study of the resort operations to determine long-term viability in its current form or if limited expansion is allowed within the existing developed area.

The committee acknowledged the positive message sent by the Legislature's support of SB2423, the bill allowing the Governor to acquire the Turtle Bay property. Final passage will demonstrate to creditors and potential buyers that the State is ready for acquisition.



LEGISLATION UPDATE

Support for two bills currently advancing toward final passage in the Legislature is important to ensure that the full range of tools are available as discussions with the owners, creditors, partners and the community move forward. Residents are encouraged to contact state legislators to express support for these measures.

Acquisition Tools Bill. SB2423 SD2 HD1, the bill authorizing the Governor to acquire the Turtle Bay property, passed out of the full Senate, passed through three House committees, and will be heard in conference. The legislation contains $250,000 for negotiations with Oaktree, but the amount of any bonds necessary to support the purchase has not yet been determined.

Land Conservation Fund Flexibility. SB3102 SD2 adds flexibility to DLNR's land conservation fund by allowing public and private moneys to be added and distributed as grants for the acquisition of state conservation lands. This bill has passed the Senate and passed Thursday through the House Finance Committee.



GOVERNOR'S LETTER TO SENATOR DANIEL INOUYE

To gain federal financial resources for the Turtle Bay acquisition, Governor Lingle wrote a letter on March 31 to Senator Daniel Inouye asking for his support in Congress. The Governor indicated that federal funding could be available through the Department of Defense Buffer Lands Program and the Department of the Interior's Land Water Conservation Fund and Cooperative Endangered Species Conservation Fund. Also, the Farm Bill could include funds for acquiring 400 acres of agricultural land mauka of Kamehameha Highway.

Please contact Senator Inouye to express your support for federal funding:

Web Form: inouye.senate.gov/abtform.html



FREQUENTLY ASKED QUESTIONS

Q1: What is the Governor's goal in acquiring the 850-acre Turtle Bay property?

A: The Governor has set the following goals for the acquisition:

(1) Preserve the long-term economic viability of the resort and its workforce, and

(2) Preserve the undeveloped lands to protect the North Shore's spectacular natural resources and unique country lifestyle.

Q2: Why are the current employees and the long-term viability of the resort important?

A: There are as many as 700 employees who work and support the operations of the resort, which is the largest employer on the North Shore and an economic engine for sustained prosperity of that community. It is in the public's interest to keep the facility active and viable. Without the resort, most of those employees who live in Kahuku, La'ie, Sunset Beach, Pupukea, and Hale'iwa would be forced to seek employment elsewhere on the island. A representative of the major employees' union is on the Governor's Advisory Working Group.

Q3: Why are the North Shore's natural resources and country lifestyle important to preserve?

A: A primary part of what makes Hawai'i so special for residents and visitors from around the world are the places of unparalleled beauty, such as O'ahu's North Shore. The Turtle Bay property includes a significant portion of undeveloped land and shoreline that greatly enhances the quality of life for all Hawai'i residents. Overdevelopment not only destroys the natural resources that the people of the state treasure, but it also detracts from the appeal of visiting Hawai'i for tourists.

Q4: Will the State be paying for the entire property?

A: Although the State may initially purchase the entire property, the Governor does not want the State to own the resort hotel, golf courses, related businesses and condominiums and will meet with those appropriate private entities interested in the property. The Governor's goal is to minimize the expenditure of public funds. Federal funds and private contributions are expected to help the State minimize the ultimate purchase price.

Q5: Will the State of Hawai'i run the resort?

A: The State will not operate or manage the resort. There have been several private entities that have expressed an interest in acquiring both the hotel and golf courses, and it is Governor's goal to sell off various parcels of the resort to pay down any debt that may be incurred in the acquisition and minimize the expenditure of State funds.

Q6: How is the current foreclosure action taken by Bank Credit Suisse going to affect the Governor's proposal to acquire the Turtle Bay Resort?

A: It is the Governor's firm belief that the State, if it acts expeditiously and decisively, can accomplish the acquisition of the resort before the circuit court appoints a receiver in the pending foreclosure suit.

Q7: I understand the Turtle Bay acquisition also includes the agricultural lands mauka of Kamehameha Highway. What will the State do with those agricultural lands?

A: The acquisition does include agricultural lands, as well as the resort's sewage treatment facility and water wells mauka of Kamehameha Highway. The vision for the mauka lands is that they will stay in diversified agriculture.

Q8: I live on leased land in the condos at Turtle Bay. If the State acquires the resort will I have an opportunity to purchase my fee from the state?

A: The State has no intention of holding the leasehold on the condominiums; it has retained an appraiser and anticipates offering the fee at fair market value.

Q9: If there isn't development, what will provide future jobs at the resort and in the surrounding area?

A: The Governor believes the Hawai'i Innovation Initiative and her emphasis on achieving energy independence can provide a strong foundation for transforming the economy of the North Shore and our entire state. As she commented in her State of the State, "It is as certain as night follows day that we cannot speculate or sell ourselves into prosperity," she said. "Instead, we have to be willing to invest in those education and workforce programs that will prepare people to succeed in an increasingly competitive world."

Q10: How can I get the most current information on the efforts to acquire Turtle Bay?

For more information, visit the Governor's Turtle Bay website: www.hawaii.gov/gov/turtlebay

E-mail the Turtle Bay Advisory Working Group at: TurtleBayAWG@gmail.com.



NEXT MEETING

The next meeting of the Turtle Bay Advisory Working Group is scheduled for Wednesday, April 16, 2008 at 10 a.m.