HOTEL HANA-MAUI SOLD

Source: Maui News/Honolulu Star Bulletin

May 24, 1999
Hotel Hana-Maui and other properties owned by Keola Hana Maui Inc., including Hana Ranch, Hana Ranch Store and Hana Ranch Restaurant, have been sold to a buyer from the Mainland. Neither the identity of the owner nor the terms of the agreement were revealed.

The transaction is expected to close on or about May 25, according to a fax sent from hotel controller David Ballard to East Maui Councilman J. Kalani English, who was thrilled.

''I'm extremely pleased and relieved that we now have the possibility of moving forward,'' said English. "Given the circumstances in Hana, this is a godsend.''

Apparently, the sale went faster than expected.

"Matters have moved forward rapidly, thus we have not been able to provide you with earlier notice,'' Ballard wrote to English.

The hotel, the biggest employer in Hana with between 110 and 120 currently on staff even as it struggled, was in the process of sending to all of its workers letters informing them of the action. According to labor laws, each employee must receive a letter of "termination'' from the seller. Employees then must apply for new jobs with the new owners.

The small hotel was built by Paul Fagan, an outgoing entrepreneur from San Francisco, in the late 1940s as a retreat for his Bay Area friends after he and his wife bought land in Hana and started a cattle ranch. He made the hotel available to general tourists a year later. According to the travel book "Magic Maui,'' it was the first Hawaiian hotel opened to the public outside of Waikiki. The 77-room hotel, long a landmark in Hana, has faced a rocky road over the past few decades as other luxurious hotels and resorts sprang up in other parts of Maui and Lanai. Management was forced to lay off employees and the entire town fell into an economic slump. The past few years have been ripe with rumors of the hotel either shutting down or being sold. Recently, about half of the rooms had been closed.

The most recent crisis erupted less than two weeks ago when the Maui County threatened foreclosure because Keola Hana Maui owed about $500,000 in back taxes. County officials said they didn't want to follow through and send the community into a complete tailspin, but had no choice because the corporation had defaulted on its schedule of payments last year.

The county gave Keola until May 31 to pay in full.

Keola officials hope the announcement of the sale will end that predicament.

"We are hopeful that the transfer of assets and operations will be successfully consummated in light of Keola Hana Maui Inc.'s continuing financial difficulties,'' wrote Ballard, "and that the operation of the Hotel and the Ranch will continue after closing on a reinvigorated basis.''

Ballard also stated that the agreement "involves the transfer of all assets and operations in Hana.'' In addition to the hotel, ranch, ranch store and restaurant, assets include Hana Ranch Stable and Hana Ranch Gas.

English said he looked forward to welcoming the new owners.