Hawaii’s economic downfall amid the coronavirus pandemic has derailed a $373 million redevelopment plan for two Maui golf courses.

The owner of the Royal Kaanapali and Kaanapali Kai golf courses, an investment fund for Hawaii public-­sector worker entitlements, recently notified another state entity that it is no longer pursuing a conceptual plan to add a hotel, about 150 to 250 condominiums and other amenities around reconfigured golf operations.

The State of Hawaii Employees’ Retirement System last week withdrew an environmental impact statement preparation notice for the project.

Elizabeth Burton, the organization’s chief investment officer, said the plan became unfeasible given the condition of Hawaii’s economy.

Burton also said ERS is working with the manager of the golf courses to evaluate alternatives going forward, but did not specify what alternatives exist.

“Kaanapali remains a very valuable part of the ERS portfolio and our desire remains for the property to be in its highest and best use going forward,” she said in a statement.

Both golf courses, which closed temporarily earlier this year under government-­imposed COVID-19 restrictions, are open.

ERS manages a diverse portfolio of investment assets for about 135,000 retired and inactive state and county employees who have earned pension, disability and other benefits.

The investment fund became the owner of the two golf courses 17 years ago via foreclosure from a company that couldn’t pay back a loan. Since then, ERS has made efforts to improve the value of the odd asset and offset the loan loss.

Amfac Hawaii, at one time a major sugar producer in the islands, was the original developer of Kaanapali Resort and had borrowed $66 million from ERS in 1991 using the two golf courses as collateral. Amfac defaulted on the loan in 2000, and ERS, which was still owed $60 million, foreclosed on the collateral in 2003.

A few years later, between 2005 and 2007, ERS spent $13 million improving the golf courses in an effort to enhance business operations and the value of the property, which it unsuccessfully tried to sell for an acceptable price.

In 2017, ERS retained an affiliate of California-based real estate investment, management and development firm Lowe Enterprises to produce the conceptual redevelopment plan aimed at reversing a trend of declining golf play and revitalizing the property just mauka of several beachfront hotels and time-share complexes including the Sheraton Maui Resort &Spa, Kaanapali Beach Hotel, Westin Maui Resort &Spa and Royal Lahaina Resort.

“I think it’s a rare chance to do that,” Ted Lennon, a Lowe senior vice president, said three years ago.

Under the plan, shrinking and re-configuring parts of the two golf courses covering 305 acres were to free up 50 acres for 156 to 256 condo units, a 136-room hotel, 80,000 square feet of retail space, a new golf clubhouse with a restaurant and pub, a family restaurant, a special-events area, a 4.5-acre park and an oceanfront beach club with a signature restaurant.

The two 18-hole golf courses, managed by Billy Casper Golf/Buffalo Strong, would have been reconfigured into one 27-hole championship golf course and a nine-hole par-3 course.

To make the envisioned changes, various Maui County amendments to zoning and community plan land-use designations were necessary, and Lowe projected that redevelopment work could start in 2020 and be finished in 2025.