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Ohana Hotel Co. LLC Selling Hotel Hana-Maui, Hawai'i to Unidentified Buyer;
200 Employees Receive Notice They May Lose Jobs

By Robbie Dingeman, The Honolulu AdvertiserMcClatchy-Tribune Regional News

Jan. 8, 2010--The iconic Hotel Hana-Maui is being sold to an unidentified buyer -- prompting a notice to 200 employees that they may lose their jobs as early as March.

The notice to the state Department of Labor and Industrial Relations is required by law when an ownership change could result in the termination of a significant number of employees.

About a year ago, California-based Passport Resorts LLC announced it had sold its ownership interest in the Hotel Hana-Maui & Honua Spa to Ohana Hotel Co. LLC.

Since then, Arden Grove Hospitality LLC has been managing the small, secluded hotel known for its understated luxury at the end of a narrow winding road.

Arden Grove Hospitality President Philip Wood yesterday said the owners have been looking for investors for several months but he would not identify the potential new owner.

"There is now a prospect on the table," Wood said. "We are in due diligence right now."

In the letter to the state, Wood said, "We intend to make every reasonable effort to make the sale a seamless transition in anticipation that the buyer will want to continue the operations of the hotel without interruption."

In 2001, Passport Resorts bought the 66-unit-hotel from Meridian Financial Resources and launched an extensive renovation project.

The hotel, Hana's largest employer, has changed hands four previous times in the past 13 years. Texas-based Rosewood Properties Co. sold it in 1989 to a Japanese company, Sekitei Kaihatsu, for $63 million. That company put it on the market as early as 1995, but didn't find a buyer until 1999 when Meridian Financial Resources, a Chicago-based investment group, took over.

Wood said the expected closing date for this latest sale would be March 26.

"We would anticipate that the transaction would be completed within the next 90 days," he said. "They want to continue to operate it as a hotel."

Wood said he has not been involved in the sale negotiations so could not provide more details. "We'd be happy to stay on as a management company," he said, but has not discussed that idea.

Since the hotel reopened in 2002, it has won more than 22 industry awards, including a listing on Travel + Leisure magazine's World's Best Hotels 2008. The hotel was ranked among the Top 25 Hawai'i Resorts in the 2008 Conde Nast Traveler Readers' Choice poll, and was honored with a AAA Four Diamond rating.

Some of the employees are represented by UNITE HERE Local 5, but union officials could not be reached for comment on the pending sale and its effect on employees.

The hotel dates to 1946, when San Francisco entrepreneur Paul Fagan established the six-room Ka'uiki Inn. Fagan also purchased Hana sugar plantation lands that he turned into the Hana Ranch.

Ka'uiki Inn, later known as the Hana Ranch Hotel, gradually expanded through the years, with extensive remodeling in the 1980s.

Reach Robbie Dingeman at [email protected].

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