James B. Nicholson, Trustee vs. Harmon

David C. Farmer, Successor-Trustee vs. Harmon

(Formerly Woo vs. Harmon & Nicholson vs. Harmon)

CV05-00030 DAE KSC

U.S. District Court For the District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

—

DEFENDANT’S WITNESS

MARK M. HEMMETER

Address to be determined.

Mark Hemmeter was born and raised in Honolulu, Hawaii. He graduated from Punahou High School in 1981 and the University of Colorado in 1985 with B.A. degrees in Finance and International Business. While at the University of Colorado, Mark also attended business school at City University in London and the University of Pittsburgh on Semester at Sea.

After graduating from CU, Mark began to work at Hemmeter Companies. In addition to general construction oversight, Mark managed individual components within the three resorts that were being developed in Hawaii. Those resorts were the Hyatt Regency Waikoloa, the Westin Maui, and the Westin Kauai at Kauai Lagoons. Mark managed the wildlife, horse and carriage, boat shuttle programs at the Westins, and most notably, the dolphin program at the Hyatt Regency Waikoloa. After the properties opened, Mark was the lead owner's representative with the Hyatt and Westin operations and was intimately involved in day-to-day operations.

While still in Hawaii, Mark also took on additional responsibilities such as President of Hemmeter Design Group, a 125-member architecture firm, and Hemmeter Aviation, an aircraft chartering and servicing firm. In early 1991, Mark was appointed to the Board of Directors of a publicly traded Real Estate Investment Trust.

In 1991, after correctly predicting the halting of large-scale hotel development in Hawaii, Mark moved to Colorado and began the development of the Bullwhackers Black Hawk and Bullwhackers Central City casinos. The total development cost exceeded $45,000,000 and both facilities were built in less than six months. As Bullwhackers' President, Mark oversaw the pre-opening efforts including the hiring of more than 900 employees, the development of a brand identification program, the approval of gaming licenses, and the construction of the facilities. After their opening in 1992, the Bullwhackers facilities quickly dominated their markets. By 1995 annual revenues approached $50,000,000 with an EBITDA of approximately $17,000,000.

In 1996, Mark left Bullwhackers to pursue other interests and since then has primarily focused his energies on the development of the Jackpot Springs Casino in Black Hawk and the continuing operation of a casino and restaurant, also in Black Hawk, named Crooks Palace [apt name]. Jackpot Springs is a $190,000,000 development located at the entrance to Black Hawk. As the developer of Jackpot Springs, Mark assembled the property, retained the consultants, lawyers, and investment bankers, secured all of the necessary local, state and federal permits and negotiated a lump sum contract with the general contractor. Construction is planned to commence in the summer of 2001.

Mark is a member of Young Presidents Organization and the Urban Land Institute. He is active with the University of Colorado, is a member of the Colorado University Real Estate Council, and guest lectures on tourism development at the College of Business. Previously on the Board of Directors of Friends School, he now serves on the Finance Committee. Mark has spoken on numerous gaming and hotel development panels at conferences around the country. He has continually held a Key license from the Colorado Division of Gaming since 1992.

Mark and his wife, Lisa, have three daughters and live in Boulder, Colorado.

www.hemmeter.com/about.html

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NEW DISCOVERIES (07-19-08):

December 25, 1995

THE GOOD, THE BAD, AND THE UNSPEAKABLE

In 1995, many ate caviar, some ate crow, and a few had to settle for humble pie

Up and up and up it goes; when it'll stop, nobody knows. In this kind of market, which was powered along by Internet and pharmaceuticals plays, it's hard to believe there even were losers in '95. The unhappiest investors were those who picked trendy retailers, riverboat gaming, and oil companies. Below, we sketch the extreme ends of the spectrum, all of which kicked off the year at a share price of $5 or better....

WORST AMEX STOCK: Resort Income Investors Inc. was designed as a 12-year self-liquidating real estate investment trust (REIT). Liquidate it did, and how.

The mortgage REIT invests in loans that are secured by property acquired to develop luxury resorts. Most of the stock is owned by the company's directors, Chris and Mark Hemmeter, a father-and-son team who made big bets on riverboat gaming in New Orleans only to see their grand plans run aground in the Mississippi mud (BW--Oct. 16, 1995).

Even worse, the Securities & Exchange Commission began an investigation and the Hemmeters, who resigned in August, were accused in court complaints of squandering company assets. The stock was recently trading at 1 1/8, down from its 52-week high of 10 1/2.

www.businessweek.com/1995/52/b345674.htm

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THE RIVERGATE

Chapter 6

gambling: the social milieu that tore the rivergate down

by c.b. forgotston

I. Gambling In Louisiana, It's A Tradition!

Louisiana has a long history of gambling.

In south Louisiana where most of the voters are located, gambling is no longer a big moral or religious issue. Louisiana is the first state after Nevada and New Jersey where the governor said he was interested in bringing Las Vegas-style casinos into the State. This excludes gambling casinos on Indian reservations which exist all over the United States. Gov. Edwin Edwards quietly talked about casino gambling during his first term, 1972-1976. On 6 January 1986, during his third term, Gov. Edwards launched a campaign to allow ten to fifteen Las Vegas-style casinos in New Orleans.

Politically it is easy to sell gambling in New Orleans because legislators outside of New Orleans have the attitude that New Orleans is "Sin City." There is nothing you can do to make New Orleans any worse. Dump on New Orleans; it can't hurt. Land-based casino gambling and riverboat casinos in New Orleans did not bother the people in the Bible Belt in northeast Louisiana just so long as it did not cost a lot of state money. This was the mind-set of the State on the eve of the proliferation of gambling in 1986.

To understand the demise of the Rivergate, one must know the players and the chronology of events.

The story hangs on a framework of two governors of Louisiana (Edwards and Roemer) and a mayor of New Orleans (Barthelemy)...

Prior to the 1991 fall elections, under then-Gov. Roemer (1988-1992), the legislature enacted three forms of gambling: lottery, video poker, and riverboat casinos. In 1990, the lottery passed for the first time since the 1890s; in 1991, video poker and riverboat casino gambling were legalized. These were the political tests for casino gambling that sent a message to the politicians; all of the legislators who voted for gambling made it through the 1991 elections without any serious political damage. The fear that the public would vote against the legislator who voted for gambling had kept the proliferation of gambling in check. (Before the 1990s gambling surge, pari-mutuel horse racing, off track betting, and charitable bingo were all legal.)

During then-Gov. Edwards' third term (1984-1988), conservative legislators in the metro New Orleans area -- Orleans and Jefferson Parishes -- could have comfortably voted for the lottery because the public opinion polls showed 75 percent in favor. However, they killed it under then-Gov. Edwards.

At the time there was a concern among some legislators that any such operations in an Edwards administration would be fraught with political problems.

Lottery (1990)

Gov. Buddy Roemer, who came to office in 1988, had a reform image. He ran a campaign opposed to gambling and promised to be anti-gambling. But this promise, like a lot of promises Roemer made, was not fulfilled.

Roemer's efforts at fiscal reform did not succeed. Louisiana still had not pulled out of the oil and gas bust that began in the early 1980s. The lottery was again proposed as a solution to Louisiana's fiscal woes. Conservative legislators who had always opposed the lottery because of Edwin Edwards, not because of gambling, got on board. Roemer rationalized that he did not have to sign or veto the lottery since it was a constitutional amendment. He was merely letting the people decide. A typical political cop-out. By this time, because of his failed fiscal reform effort, Roemer was politically weakened and had lost some of his characteristic cockiness and arrogance. Further, he was plagued by the fact that he had not been elected by a majority of the people. In 1990, the lottery passed with an overwhelming 75 percent popular vote, and general happiness prevailed. The barrier to gambling was broken by the lottery. It appeared clear to the politicians that the public was not opposed to gambling.

Riverboat Casino Gambling (1991)

The people who had been pushing riverboat casino gambling for years and had not gotten anywhere took advantage of the softened attitude toward gambling and presented it as an adjunct tourist attraction. The big players were New Orleanians Warren Reuther, Pres Kabacoff, and Jim Smith. Riverboat casino gambling began as a New Orleans concept but soon became a statewide concept due to political wheeling and dealing.

By a small margin, riverboat casino gambling passed in the legislature, and the anti-gambling governor, Roemer, signed it!

Video Poker (1991)

Representative Peppi Bruneau (Republican, New Orleans) had for years been trying to pass legislation to outlaw "gray market" video poker machines. Bruneau concluded that if we cannot outlaw these machines, then we should regulate and tax them. This is an excellent argument for prostitution, too. Following the approval of the lottery and riverboat casino gambling, video poker squeezed through the legislature. Roemer allowed it to become law without his signature. In retrospect, Roemer has stated that he considers this one of the biggest mistakes of his career as governor.

III. Stage Set For Las Vegas-style Casino Gambling

In 1991, Edwin Edwards defeated his opponent, David Duke, the one-time Ku Klux Klan Grand Wizard. The stage was set for Las Vegas-style casino gambling.

Then-Gov. Edwin Edwards had a well known, well deserved reputation as a gambler. He went to Las Vegas regularly, and he knew all the players there. Since the governor of Louisiana is such a strong force in state politics, when Edwards declared he wanted Las Vegas-style gambling, Louisiana became the focus of the expansion of gambling in the United States. Additionally, the mayor of New Orleans, Sidney Barthelemy, was the only mayor of a major city in the country who indicated a desire to have casino gambling. New Orleans was still in the doldrums, and Barthelemy did not know what else to do to create jobs, nor would he listen to other viable options, such as the Louisiana State University-Tulane University-Charity Hospital Medical Complex in downtown New Orleans, the Port expansion, and the proposed (now developing) research park at the University of New Orleans on the lakefront.

By 1991, the lottery was up and running. There were no major scandals, but it had only been in operation for a year. Not a single riverboat casino had been built. And video poker had not come on line. The state's economy was still down. Louisiana had a governor sympathetic to gambling (Edwards was elected to an unprecedented fourth term, 1992-1996), and New Orleans had a lame duck mayor who had nothing to lose (City Charter limits the mayor to two terms).

In February 1992, Steve Wynn, owner of the Mirage and other casinos in Nevada, came to New Orleans. Wynn, reputed to be the golden-boy of the casino gambling business, quickly pointed out that there had never been a successful "free-standing" (no hotel or restaurants included) casino. He hired people to study the New Orleans market as a gambling center, spent several million dollars, and walked away from it. Wynn said his preference, if he were going to move out of the traditional gambling venue of Nevada, would be a city like Atlanta rather than New Orleans. Atlanta has a much larger population, a stronger economic base, and is an airline hub, which is extremely important in bringing in gamblers from out-of-state. All of his sound reasons have proved why Las Vegas-style casinos won't work in New Orleans.

IV. Daniel Robinowitz, Father Of Land-based Casino Gambling In New Orleans

New Orleans native Daniel Robinowitz, a real estate developer who lives in Dallas, was the father of the casino at the Rivergate site. He had done projects in the New Orleans area (the Uptown Square and the Galleria), which were financial successes for him but disasters for the region. When Edwards started his fourth term (1992), Robinowitz, knowing Edwards' gambling background, had a vision that the time was right to bring Las Vegas-style casino gambling to New Orleans. He conceived the idea of a "free-standing" casino.

Robinowitz needed a big name developer and approached Steve Wynn. Probably because Wynn's appraisal did not fit with what Robinowitz knew he could sell in New Orleans, Robinowitz had only a brief flirtation with Wynn. Robinowitz did not want to get into a fight with the hotel and restaurant people. Within a matter of weeks Robinowitz aligned himself with Chris Hemmeter, an Hawaiian developer.

Chris Hemmeter was reputed to be a very wealthy man. The hotels that he developed in Hawaii received mixed reviews about their success. He was a developer much like Robinowitz -- he got his money off the top and left it to somebody else to manage. Like Robinowtiz, some of his deals went into bankruptcy.

Everything Hemmeter attempted in Hawaii was to be the biggest and the best. He had a reputation for rarely letting the financial consequences affect his development decisions. Robinowitz was probably more comfortable with Chris Hemmeter than Steve Wynn who was more bottom-line oriented. Prior to New Orleans, Hemmeter had never been involved in gambling developments, another Robinowitz mistake. Once Hemmeter got into the gambling business, he saw money everywhere! Hemmeter's escapades with riverboat casino gambling in New Orleans and in other states and land-based casino gambling in Colorado (all carried out during the time of the New Orleans casino operations) were all financially unsuccessful.

V. Snake Oil And Fairy Dust

A dapper, smooth talking promoter, Hemmeter painted a picture of revitalizing the riverfront and the decaying downtown New Orleans. A billion dollar development! No one in New Orleans had ever done a billion dollar construction project before. Hemmeter said if the legislature legalized gambling in the coming session, he "might" consider a casino in his plan. City Hall and some of the traditional business and civic leadership of the city, lured by revitalization and the number of jobs it was supposed to create, lost sight of the possibility that it could have been a scam. The super snake oil salesman sprinkling fairy dust fooled a lot of people, including some very bright, successful business people.

Two City Councils did not require a financial statement from Hemmeter (it was considered an invasion of privacy). Nor did they require a performance bond.

The Times-Picayune sent reporters to Hawaii to investigate Hemmeter, but they did not turn up anything of significance. Just by luck, I became acquainted with an Honolulu investment banker with some New Orleans connections who knew Hemmeter well. He speculated that Hemmeter did not have great wealth and might even have a negative net worth. He said unless Hemmeter went into bankruptcy, we would never see his financial statement.

VI. The Rivergate Gambled Away

HB-2010

The bill to authorize a land-based casino in New Orleans, HB-2010 (Act 384 of the 1992 Regular Session), may have been the most controversial vote ever taken in the Louisiana House of Representatives. John Alario, then speaker of the House and an ally of Gov. Edwards, demonstrated the power of his position as well as the power of Edwards when he maneuvered the casino bill through the House on Wednesday 10 June 1992. The previous Thursday a similar bill had fallen seven votes shy of the needed 53-vote majority to pass. It was returned to the calendar. On 10 July, HB-2010 did not appear on the regular order of the day (agenda); instead it was taken out of order and was ready for a vote sending a surprise wave over members of the House. Then-Speaker Alario ordered the electronic vote count to begin. At the electronic count of 53, he ordered the vote halted without the customary few seconds lag between the vote count and freezing the vote, which allows for a little gamesmanship (Maginnis 1995, 30).

The legislation specifically defined the location of the land-based casino -- the Rivergate site at the foot of Canal Street. The law did not require the Rivergate to be torn down, and it did not require a new casino to be built. Once the determination was made that Hemmeter's grandiose casino was going to be built, the destruction of the Rivergate was a fait accompli.

The passage of HB-2010 was the formal beginning of the casino and the end of the Rivergate. The City Council, apparently pressured by Mayor Barthelemy, awarded to Chris Hemmeter the lease of the city-owned Rivergate site. Subsequently, the Casino Board awarded Harrah's Jazz the casino operator's license. Harrah's Jazz was a partner of Harrah's and the Jazzville group (all local investors) who came together because they thought they had the best chance of getting the votes on the Casino Board to win the license over Hemmeter. They'd worry later whether they could get along.

Shotgun Marriage

From a practical standpoint the lease-holder (Hemmeter) and the license-holder (Harrah's Jazz) needed each other. There had been such fierce competition for the operator's license that to "marry" the two entities became a significant hurdle. A shotgun marriage was brokered in the governor's mansion! In typical Edwin Edwards fashion, the three factions -- Harrah's, Jazzville, and Hemmeter -- were ordered by Edwards to quickly work it out themselves. The logical thing to do was for Harrah's Jazz to buy out Hemmeter, but he wouldn't budge. All elements felt that each had the political clout to win the land-based casino operator's license. Gov. Edwards had friends representing both Harrah's and Hemmeter, and everyone of the Jazzville group was a friend and political supporter of his. As long as Edwards had friends in each camp, compromise was in his best interest. The gamblers were so hellbent on getting rich quick that they split the pot of gold three ways. Gov. Edwards performed the shotgun marriage and gave them his blessings. Now the three would worry later whether they could get along.

Point Of No Return For The Rivergate

The partnership of Harrah's and the Jazzville group was the point of no return for the Rivergate. It had been reported that Harrah's had an arrangement with the labor unions for exclusive union labor on their next casino that would be constructed. An adaptive reuse project such as the Jazzville group proposed to the Casino Board would not satisfy the unions. Peter Babin, local labor leader, publicly promoted tearing down the Rivergate for the sole purpose to create jobs. This gave further cover for the politicians.

The second fatal blow to the Rivergate came when Hemmeter "married" the Harrah's Jazz partnership. To put the entire Grand Deal together politically, it was necessary to make a lot of smaller deals. In reality, it was constructing a giant building on Louisiana political quicksand!

VII. $825 Million Casino Bankruptcy, Where Did All The Money Go?

A lot of money went to reimburse Hemmeter for pieces of land in the vicinity of the Rivergate that he optioned at exorbitant prices. He seemed to buy into his own snake oil and fairy dust and to believe that the casino was going to be so successful that everything for blocks around would become very valuable. Hemmeter operated on "other people's money." Some of his deals were very cash thin: he might put up $1000 cash for a piece of property that he optioned at $1 million. When the financial deal was closed, the options were exercised with the proceeds from the sale of junk bonds. The inflated land prices took a big chunk of the money. Some of the money was probably spent on "political overhead." It is my understanding that when the junk bonds were sold, all of the parties were made whole for their prior out-of-pocket expenses. The interest rate on the over $400 million in junk bonds was approximately the equivalent of 18 percent. This added substantially to the financial debacle.

Although the entire land-based casino project was estimated at $825 million, the unfinished building on the Rivergate site at the foot of Canal Street represents only approximately $200 million including parking garages. Thus, it appears that of the $825 million total project almost $600 million went to "political overhead." As of the filing of bankruptcy in November 1995, approximately $150 million more was needed to complete the facility.

Included in the "political overhead" was the renovation of the City's Municipal Auditorium (built 1930) for Harrah's temporary casino. It was to be used for only one year; the cost of renovation was $45 million. The temporary casino actually was in operation for less than seven months. Apparently, cost was no object.

In the gambling industry, gross win is determined by the amount of square footage in a casino's gambling area. In Nevada, the average is $2,000 per square foot. In Atlantic City, the win is approximately $3,200 per square foot. On the Mississippi Gulf Coast, it's around $1,270 per square foot. The Municipal Auditorium was renovated on the basis of an $8,000 per square foot win. The casino at the Rivergate site was projected to average $4,000-$5,000 per square foot win.

The latest projections for the bankrupt casino, should it ever be up and running at the Rivergate site, would require 15,500 patrons who lose an average of $70 each, 365 days a year to merely break even. The casino would have to draw annually more patrons than did the Aquarium of the Americas, the Louisiana Superdome, the Flamingo (riverboat casino near the Rivergate site), plus all of the convention delegates who went to the Ernest N. Morial Convention Center in 1996 combined! [On 1 October 1997, the Flamingo ceased operation in New Orleans.]

VIII. Harrah's Jazz Casino, The Chernobyl Of Casino Gambling!

What went wrong with the New Orleans land-based casino will likely go down as one of the all time great business disasters that will be analyzed by students at the great business schools in America. As with most business fiascos, there tends to be something simple that has been over looked. In this case the gambling promoters failed to do a market study. They appeared to have operated under the philosophy "build it and they will come!" Unfortunately for them that works only in the movies.

The demographics of the ten million annual convention and tourist visitors who come to New Orleans were never analyzed by the gambling promoters. The conventioneers (vast majority of these visitors) represent the cream of the crop of the hospitality market. They tend to be well educated and financially well off, the higher socio-economic level. Such individuals tend not to gamble. What draws them to New Orleans is the Vieux Carré, the food, the music, the architecture, and the general ambience of this historic city.

The white elephant building now on the Rivergate site was started in January 1995. The temporary casino at the Municipal Auditorium opened in May 1995, and the whole $825 million project went bust in November 1995. Unfinished and boarded up, Harrah's Jazz Casino is a monument to greed and corruption. The city was left with approximately a $23-million hole in its budget, the state with a $100 million in unrealized revenues, and unsecured creditors owed over $50 million; New Orleans has another political architectural folly!

http://www.tulane.edu/~rivgate/chapter6_text.html

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Edwin Washington Edwards (born August 7, 1927) served as the Democratic governor of Louisiana for four terms (1972–1980, 1984–1988, and 1992 –1996), twice as many terms as any other Louisiana governor has served. Edwards was also Louisiana's first Catholic governor in the twentieth century and perhaps with the exception of Huey P. Long, was Louisiana's most popular governor. A colorful, powerful and legendary figure in Louisiana politics, Edwards was long dogged by charges of corruption.

In 2001 he was sentenced to ten years in prison on racketeering charges. Edwards began serving his sentence in October 2002 in Ft. Worth Texas, and was later transferred to an Oakdale, Louisiana, facility.

Two men whom Edwards defeated in Louisiana elections, David C. Treen and J. Bennett Johnston, Jr., and a third who was Edwards' protege, John B. Breaux, confirmed in July 2007 that they intend to approach U.S. President George W. Bush about procuring a pardon or commutation for Edwards, who celebrated his 80th birthday in prison in August 2007.

http://en.wikipedia.org/wiki/Edwin_Edwards

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October 10, 2003

Hemmeter
still fighting

The one-time Hawaii resort
developer has come back
to town to see friends
and speak his piece

By Russ Lynch, Star-Bulletin

Former Hawaii developer Chris Hemmeter has battled prostate cancer and Parkinson's disease and is now dealing with a killer cancer affecting the bile duct. For Hemmeter, it's a liver transplant or death and his doctors told him he wouldn't make his 64th birthday.

But in a visit with friends in Honolulu this week, which included a party for that birthday, Hemmeter said his biggest trial was dealing with corrupt politicians in New Orleans.

Hemmeter -- who developed King's Alley and the twin-tower Hyatt Regency Waikiki, [on land leased from Kamehameha Schools/Bishop Estate] as well as luxury resorts such as the Hyatt Regency Waikoloa on the Big Island, now the Hilton Waikoloa Village, and the Westin Maui -- said in an interview that he was upset about the way Louisiana reporters picked on him over his grand plan for a $1 billion casino in New Orleans.

The bottom line to Hemmeter is that while the casino plan failed, it also put Louisiana Gov. Edwin Edwards in federal prison a year ago, to serve a 10-year term for extortion.

And Hemmeter said the luxury resorts he built in Hawaii made real money for him and his family and are now doing well again, despite setbacks under mostly Japanese owners following the burst of the late 1980s Japanese investment bubble.

Hemmeter sold those resorts at big profits, but when he stepped into the murky waters of Mississippi politics he ran aground, leading to the filing of personal bankruptcy by Hemmeter and his wife Patsy in 1997.

It began with the award to the Hemmeter group 10 years ago of a lease for a property designated to house the city's first land-based casino. The 60-year ground lease, worth hundreds of millions of dollars, was awarded because "we had the best plan," Hemmeter said.

Enter Edwards, a keen gambler and, according to Hemmeter and other critics, a corrupt politician. Edwards wanted a piece of the action for himself and his cronies and relatives, Hemmeter said. "He let me know in no uncertain terms that he expected his boys cut in on the deal. We said, no way we could do business like that," Hemmeter said. That's when the rot set in, ending with Edwards ignoring the law that said the land owner, in this case Hemmeter's company, would choose the gaming operator and simply telling Hemmeter that his choice of Caesar's as an operator was not going to be approved.

In the end, Edwards forced through a deal with three companies sharing the business, leaving Hemmeter with about a third of it.

"I ended up as a minority investor and watched my investment go down, down, down," Hemmeter said.

Hemmeter, who had kept his Hawaii developments as individual entities, ended up breaking that rule in New Orleans and consolidating several of his companies and pledging several multimillion-dollar homes as collateral for loans. The first casino, on a temporary location intended to get the business started while a new one was built, closed a few months after it opened in 1995, with Edwards' pick Harrah's going bankrupt and bond-holders unable to recover the $400 million they had invested.

That was about the end of the saga, except for the corruption and extortion federal case against Edwards.

During the selection process, Hemmeter paid for Edwards and other Louisiana officials to make luxury trips to Hawaii.

Hemmeter maintains that was all part of the shakedown and said he was vindicated when it was revealed that federal investigators had bugged his phones for 2 1/2 years and in "tens of hours" of tapes and they were unable to show one incident in which Hemmeter did anything wrong. The experience certainly soured him on the location. "I've never set foot in New Orleans, even to change planes, since 1995," he said.

For now, Hemmeter is looking after his health. He hopes for a liver transplant in the next month or so. He and his family have embarked on a new business, a Western-style restaurant called Saddle Ranch Chop House. The first unit is up and running next to the Universal Studios theme park in Los Angeles and is doing well, particularly late at night when the mechanical-bull rides, music and bands are in full swing, he said.

"We're doing just under $1 million a month in revenues" and that works out to about $250,000 in profits. Planning for four more restaurants in the next two years, Hemmeter said he hopes for eventual profits of more than $10 million a year and a number of potential buyers are paying attention.

"We should be able to get 10-12 times earnings when we sell," he said. The restaurant business is headed by Hemmeter's oldest son, Mark.

Hemmeter is also working on a golf project on the mainland. He said his family businesses have lined up some 400 pay-for-play golf courses that are interested. The idea is to have a couple of holes at each golf course wired for video with half a dozen cameras at each hole. Golfers can turn it on by dropping a $2 token in a slot and later they can go to a Web site and watch the video along with an analysis of their swings.

There will also be a $10,000 prize for a hole in one and the cameras won't let anyone cheat, he said.

Meanwhile, Chris and Patsy Hemmeter are living in a gated community near Bel Air, outside Los Angeles. Second son Chris graduated from Harvard business school and went into a dot-com business. When that failed, he got into the food and beverage distribution business and started a credit card for restaurants, but he wants to get a doctorate and may end up teaching.

Daughter Katie is doing well as an actress and playwright and makes money buying and selling residential real estate, Hemmeter said.

The Hemmeters had a "reverse surprise birthday party" at the Kahala Avenue home of lingerie multilevel marketing moguls Walter and Tiffany James Wednesday night, with a short but elite list of guests invited for what they thought was going to be a video-conference with Hemmeter speaking from the mainland.

Present were three former governors -- George Ariyoshi, John Waihee and Ben Cayetano -- former Mayor Frank Fasi and an array of other Hemmeter friends representing much of the long-time business leadership in the islands.

Guests were delighted when Walter James, who runs UndercoverWear with his wife, confessed that Chris and Patsy Hemmeter were in the house. Hemmeter was welcomed warmly and he said doctors had told him and Patsy that they should not expect him to be around for a 64th birthday party.

One who was completely taken by surprise was Larry Johnson, former chief executive officer of Bank of Hawaii, who had arrived only half an hour earlier on a flight from New York. Johnson said he hadn't showered but his wife Claire told him not to worry because the video link would not detect any body odor.

Thos Rohr, who headed the group that developed the Waikoloa Resort, said the best thing about Hemmeter was that he started at the bottom, as a trainee with Sheraton Hotels here in the early 1960s, and rose to the top, handling deals with hundreds of millions of dollars in the same gracious way he always acted.

Tim Guard, a longtime Hemmeter friend and president of the stevedoring company McCabe, Hamilton & Renny, called the reunion "an evening of smiles."

www.starbulletin.com/2003/10/10/business/story2.html

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November 28, 2003

Developer Christopher Hemmeter
dies at age 64

Pacific Business News (Honolulu)

Christopher B. Hemmeter, a prolific developer who built some of Hawaii's most notable hotels and resorts, died Thursday at his Los Angeles home. He was 64.

Eight months ago he was diagnosed with severe liver cancer. He also had been coping with Parkinson's disease. This was his second bout with cancer.

Sharing memories of his father, son Mark Hemmeter told PBN from Los Angeles, "Thanksgiving was his favorite holiday because it was all about just family. Our whole family was with him yesterday, and it was very peaceful."

Hemmeter came to Hawaii in the 1960s and became a noted developer while still in his 20s, along with partners Henry Shigekane and Diane Plotts. Many credit Hemmeter with creating the concept of a destination resort. He moved to the mainland in 1991 and became a casino developer in Colorado and New Orleans. His most recent venture was a successful restaurant near Universal Studios.

Former President Jimmy Carter, Hemmeter's close friend, told PBN for an October profile: "Chris has the uncanny ability to dream ... then put his concepts into practice for the enjoyment of countless others."

"We are extremely saddened by his passing, but we also rejoice as we reflect upon his life," the family said in a statement Friday. "He stood for all that was good in us and gave unselfishly of his time and energy. He will be greatly missed. His affection and caring for others, his charisma, and his professional accomplishments lead many people to pronounce that he was truly 'larger than life.'"

For his accomplishments, Hemmeter has received numerous awards including being named twice as the Businessman of the Year, Salesperson of the Year, Marketing Man of the Year and Islander of the Year in Hawaii. He was inducted into the American Academy of Achievement in 1979. In 1991 Hemmeter was selected the Independent Hotelier of the World.

Hemmeter's activities went beyond the hotel industry. He was the founder and chairman of the Bank of Honolulu, a director of the First Hawaiian Bank, a director of the National Symphony Orchestra in Washington D.C., a trustee of Punahou School in Honolulu, a member of the Young Presidents Organization, a director of the Carter Center, a director of Morrison Knudsen, a director of Resort Income Investors, and a Trustee Fellow of Cornell University where he received the prestigious Entrepreneur of the Year award granted to Cornell University graduates.

"Hawaii needs to appreciate his contributions to the visitor industry and the state," close Hemmeter friend and retired Bank of Hawaii CEO Larry Johnson told PBN previously. "His legacy will live here forever."

He is survived by his wife of 25 years, Patricia; children Mark and daughter-in-law Lisa, Chris and fiancée Debi, Katie and husband Cully; stepchildren Kelley, Shane, Brendan and wife Brook, and Holli; sister Sally Younge and husband Eric; brother Dr. Mead Hemmeter and wife Mari-Jo; sister-in-law Karen Cook; and six grandchildren, Taylor, Maddy, Annabelle, Austin, Ryan and Quinn.

Private services will be held Sunday in Los Angeles. In lieu of flowers, donations can be sent to the new Christopher B. and Patricia K. Hemmeter Kahaola Hospice Foundation at 1164 Bishop St., Suite 800, Honolulu, HI 96813.

http://pacific.bizjournals.com/pacific/stories/2003/11/24/daily58.html

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Mark Hemmeter is expected to testify regarding his business, professional, political and personal relationships with Kamehameha Schools/Bishop Estate; Diane Plotts, Louisiana Governor Edwin Edwards, Constance Lau, Steve Case, Barack Obama, Suzanne Case, The Nature Conservancy, Faye Kurren, Judge Barry Kurren, Henry Paulson, Goldman Sachs, Linda Lingle, The Maui Planning Commission, Judith Neustadter Fuqua, James B. Nicholson, Barron Hilton, Hawaiian Airlines, Lyn Anzai, Earl Anzai, Mary Lou Woo, Steven Guttman, James Duca, Carol Muranaka, Curtis Ching, Peter Savio, Robert Kihune, Gilbert Tam, Judge David Ezra, Judge Lloyd King, George Wackenhut, John Waihee, Ben Cayetano, Frank Fasi, Sukamto Sia, Guido Giacometti, Susan Tius, Ron Rewald, Paul Alston, David Schutter, Jon Miho, Trinity Investments, Aloha United Way, Leonard Millman, R. James “Jim” Nicholson, Invesco; Norm Brownstein; Gale Norton, Dan Inouye; The Bureau of Indian Affairs; Robert Rubin; George Ariyoshi; Aon; AIG; Hawaiian Insurance Companies; Hawaiian Electric Companies; First Hawaiian Bank; Marsh & McLennan; Gensiro Kawamoto, Jack Abramoff, Jeff Watanabe, Colbert Matsumoto, Mark McConaghy, PricewaterhouseCoopers, David Farmer, Bishop Museum, Bob Olson, Jon Markell, Kai Markell, Bank of Honolulu, Donna Tanoue, Bank of Hawaii, Lawrence Johnson, Sandwich Isles Communications, and others to be named upon discovery.