The owner of the Grand Wailea Maui, a Waldorf Astoria Resort, is ready to embark on a $150 million-plus expansion — a move that would help capitalize on its 2018 property purchase, which at the time was the highest price ever paid for a Hawaii hotel and the second-highest price paid in the nation.
New York-based Blackstone Group LP, a private equity firm, purchased the 776-room Grand Wailea for $1.1 billion, a price that was trumped only by the sale of Manhattan’s Waldorf Astoria for $1.95 billion.
BRE Hotels & Resorts, a Blackstone portfolio company, earlier this year went before the Maui Planning Commission seeking a “step one” and “step two” planned development permit and a special management area use permit, one of the regulatory hurdles required for development in Hawaii’s coastal zones. They wanted to add 224 units across three additional towers to the resort.
The owners also wanted to remove the resort’s Seaside Chapel and redo its iconic Hibiscus Pool. Those plans had a smaller footprint than the now-expired 2012 special management area use permit that gave the previous owner permission for a 300-room expansion. The Maui Planning Department recommended the Planning Commission approve the plans, which met with community opposition in May when they went before the panel.
Some objected to the chapel’s removal and redesign of the Hibiscus Pool. But the greatest pushback came from three Native Hawaiian groups — Malama Kakanilua, the Pele Defense Fund and Ho‘oponopono ‘o Makena — which have since filed a petition to intervene in the permit process.
The hui alleges the resort was built on a sacred burial site where kupuna were interred in the traditional way under piled stones or in sand dunes without surface markers. They contend further construction would disturb even more iwi, or bones, which many Native Hawaiians believe carry spiritual power and are protected by state law.
Jim Petrus, senior vice president of asset management in Hawaii for BRE Hotels & Resorts, said the resort’s owners are working to address iwi concerns with the State Historic Preservation Division, which has given them a letter validating their efforts. Petrus, who was general manager of the resort when it opened as a Hyatt in 1991, said the new owners also have modified their original plan in response to the community’s design concerns.
When the resort’s permit requests go back to the Maui Planning Commission, likely Jan. 28, Petrus said they’ll also reveal a scaled-down concept that reduces the number of additional midrise towers to two from three and the number of units to 151 from 224.
The commission deferred a decision on the plan in May because it lacked a quorum. Authority for special management area use and planned development permits rests solely with the commission, which must determine that a proposed development has been managed to protect a broad spectrum of resources. Next the developer must apply for construction-related permits from the county Department of Public Works.
Looking for balance
If the new plan is approved, it would create 250 new construction jobs and $57 million in new payroll. The renovation would grow the resort’s footprint over the next couple of years to four towers, ranging from four to seven stories, with 927 units. It would also create 80 new permanent full-time jobs in key areas, including food & beverage and recreation.
Owners have decided to leave the wedding chapel, although they’ve still got plans to redo the Hibiscus Pool by adding more decking and infinity edges, Petrus said. They’ve spoken to select community members and intervenors about the changes and have pledged to address concerns about how to handle possible iwi disturbances during construction, he said.
“I think we were hoping that was going to show a good-faith effort,” Petrus said. “This really ties back to our ability to, you know, demonstrate that, hey, we are doing things that are right for the community. We are doing things that are right for the hotel and looking for that balance where we can find a way where tourism development and cultural elements can all coexist at the same time.”
To that end, Grand Wailea just rolled out an “Aloha Pledge” advising guests how to be responsible visitors. Taking a page from Blackstone’s recent battle over planned expansion at Turtle Bay Resort on Oahu’s North Shore, resort owners also donated $75,000 to set up a charitable foundation that gave $30,000 to local nonprofits on Dec. 1.
A similar foundation at Turtle Bay Resort has done much to heal the community, which is now dotted with fewer “Keep the Country Country” signs.
“The Grand Wailea Foundation underscores our resort’s commitment to giving back to the community we serve,” JP Oliver, managing director of Grand Wailea, said in a statement.
Petrus said investing in improvements also is part of creating a sustainable future for the resort’s 1,500 employees and the community that it supports. At earlier permit hearings this year, the Maui Hotel & Lodging Association and the Maui Chapter of the Hawaii Carpenters Union offered preliminary support for the expansion.
“The Grand Wailea has been there for almost three decades, and Wailea as a destination is probably the most competitive, and it has the highest (revenue per available room) of probably any location in America today,” Petrus said. “And, really, we are looking at ways to evolve the hotel so it’s competitive with the other great properties in a highly competitive market in Wailea.”
Over-tourism concerns
Some in Maui are excited the resort’s new owners are bringing new opportunity to the once-troubled asset. The resort was built for Japanese mogul Takeshi Sekiguchi at the height of the Japanese economic bubble, but by the late 1990s the financially overextended Sekiguchi had lost control of the property.
In 2011 the resort was placed into bankruptcy along with four mainland luxury resorts after the owner of the properties couldn’t restructure $1.5 billion in debt.
Blackstone picked it up during a 2018 buying spree in Hawaii, which also resulted in the $330 million purchase of Turtle Bay Resort and the $275 million purchase of The Ritz-Carlton, Kapalua.
Joseph Toy, president and CEO of Hospitality Advisors LLC, said the Grand Wailea improvements have been a long time coming and were expected based on Blackstone’s top-dollar investment. Toy said further investments will only strengthen Maui’s strong hotel market.
But Dick Mayer, a Kula resident who formerly served on both the Maui General Plan Advisory Committee and Maui Planning Commission, said he objects to further hotel construction since Maui is already over the 3-to-1 ratio of residents to tourists outlined in the county’s Maui Island Plan passed in 2012.
“Tourists are now 41.3% of the resident number. There are only 2.4 residents for every 1 tourist,” Mayer said. “We’ve got over-tourism, and we don’t need any new hotel development. If the Grand Wailea plan goes through, it will only add to the traffic and congestion and put more strain on our shortage of potable water.”
Mayer said others in the community objected to the original plan to remove the stained glass-adorned chapel where many community members have gotten married. There also were concerns over the impact that sea level rise could have on the shoreline property.
Iwi handling questioned
The most aggressive complaints come from intervenors.
Clare Apana, president of Malama Kakanilua, said that before the Grand Wailea Resort opened in 1991, the Maui Burial Council recorded 300 burials still needing to be reinterred. Construction workers reported bones were removed and trucked off the property to an unknown location, she said. There’s also documentation stating that an additional 200 or so burials were disturbed within the hotel’s first 20 years of existence, she said.
“This area was a special area. The number of burials there shows that,” she said. “Though it’s rubbish to a developer, one bone is a person to us.”
Petrus, who was there when the resort was constructed, said when iwi was found at that time, construction stopped. He said all bones were then methodically collected, monitored and reinterred on the property in an area behind the kids club, which would not be disturbed by new construction.
“There’s a fair degree of confidence that the area we are looking at developing would really be exempt from any situation where there could have been burials,” he said.
New construction will take place on a site that is mostly basalt topped with fill, but if any iwi are found, Petrus said the resort has agreed to use a two-step monitoring system with ample checks and balances.
But Apana said there can be no compromise when it comes to burials. And, until the matter is resolved, she said there shouldn’t be talk of design, either.
“Landowners have a responsibility to not be digging and continuing to ask to do projects inside a known burial area,” she said. “I don’t believe enlarging the footprint and the pool size and threatening our iwi kupuna is at all respectful. I don’t care what they say — there’s no way that they took every ancestor out of there. It’s such an emotional thing for us to be advocating for something that’s just human decency. “
She also questions the owners’ sincerity when “they’ve already put in two permits for two different wings while we are negotiating.”
Carol Kamekona, a board member of Malama Kakanilua, said further construction cannot be allowed at the Grand Wailea, which was built on top of her ancestors’ burial grounds.
“If you put your beloved into the ground, you expect that they would be honored and left there. Why is it that our burials have to be dug up and disinterred and disrespected for progress and development?” Kamekona said. “Developers don’t go into a regular cemetery because it’s disrespectful. But they don’t respect our traditions.”
