The Vultures in
Vms Realty Partners
Sightings from The Catbird Seat
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January 26, 2001
Maui Hyatt sold for $200 million
By Andrew Gomes, Advertiser Staff Writer
New York based private investment bank The Blackstone Group has contracted to buy the Hyatt Regency Maui Resort for an estimated $200 million from KM Hawaii Inc., an affiliate of Japan-based transportation company Kokusai Jidosha, according to people familiar with the deal....
Founded in 1985 in part by the former chief executive of Lehman Brothers, Blackstone has been looking for upscale hotel investments in Hawai`i for several years. In 1998, the company unsuccessfully pursued one of Waikiki’s finest, the Halekulani.
People with knowledge of the Maui Hyatt deal said a purchase agreement for the 806-room Ka'anapali hotel —— Maui’s largest —— has been reached, and said Hyatt, which manages the property with about 1,000 employees, may be taking a small ownership interest in the hotel in exchange for a long-term management contract with Blackstone....
If completed, the Hyatt sale would follow sales of four other major properties in 1998: the Maui Marriott Resort for $152.5 million; the Westin Maui for $132 million; the Grand Wailea for $263.5 million; and the Kea Lani for an undisclosed amount.
The Hyatt Regency Maui, trophy of the Ka‘anapali resort, also has been attractive to buyers. It was developed for $80 million in 1980 by luxury resort developer Christopher Hemmeter and sold to KM Hawai‘i by Chicago real estate firm VMS Realty for $325 million in 1987.
KM Hawai‘i spent about $30 million on renovations in 1990 and 1996. Last year, the hotel opened a $3.5 million spa....
From: Honolulu Star-Bulletin, 7/31/97: . . .
A Chicago-based partnership is buying the 318-room Keauhou Beach Hotel on the Kona Coast....
Trinity Investment Trust LLC, which is also purchasing the mortgage to the Aloha Tower Marketplace, has signed a letter of agreement to acquire the beachfront hotel from Azabu USA.
The hotel, built in 1970, sits on land leased from the Bishop Estate....
Azabu, headed by maverick deal maker Kitaro Watanabe, acquired the Keauhou Beach Hotel in 1987 for $13 million. During the 1980s, Azabu invested about $600 million in Hawaii, acquiring the Hyatt Regency Waikiki, the Ala Moana Hotel, the Maui Marriott and the Kona Lagoon [also on land leased from Bishop Estate].
Since then, Azabu has run into a string of financial difficulties. In 1993, lender Mitsui Trust & Banking filed a foreclosure suit on the 1,200-room Hyatt Regency.
In 1994, Mitsui wrote off $1 billion in bad debts from loans to Azabu.
Last month, Tokyo officials arrested Watanabe and two other Azabu officials alleging that they illegally concealed company assets from creditors. Azabu's Hawaii subsidiary said then that the arrests had no effect on the company's local operations.
Trinity, meanwhile, is part of a new wave of American buyers who are purchasing properties from financially troubled Japanese investors....
The company -- whose investors include former VMS Realty executives George Ruff, local attorney Jon Miho [of McCorriston Miho Miller & Mukai, defense attorneys for the Bishop Estate trustees] and hotel developer Charles Sweeney -- is trying to acquire the $60 million mortgage to the Aloha Tower Marketplace from Mitsui and take over the waterfront complex.
Last year, Trinity and Apollo Advisors L.P. bought the $130 million mortgage to the nearby Harbor Court luxury office and condominium complex for an undisclosed price from Mitsui.
Trinity has also joined up with Apollo, time-share operator Signature Resorts Inc. and Goldman Sachs' Whitehall Fund [another Bishop Estate investment] to buy the 413-room Embassy Suites Resort on Maui for $78 million....
[A Catbird Comment: Note that nowhere in this news article is there a tweet about Azabu's connection with the Yakuza.]
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Honolulu Star-Bulletin, 3/11/99, by Gordon Pang: Yoshimura Accused of Condo Conflict of Interest . . .
Colleagues of Councilman Jon Yoshimura say he has a conflict of interest in the Harbor Court condominium project.
Council Chairman Mufi Hannemann and members Steve Holmes and Donna Mercado Kim say Yoshimura should not be voting on matters involving the Harbor Court project because he is working for the project's chief lender.
Harbor Court Developers owes the city about $12 million for the fee interest of the property.
Yoshimura, an attorney, disclosed yesterday that he is being paid by the law firm of Verner Liipfert Bernhard McPherson Hand to do lobbying work at the state Legislature on behalf of Trinity Investment Trust LLC.
Yoshimura said that under the direction of former Gov. John Waihee, a Verner Liipfert attorney, he is lobbying to help Trinity gain the right to put up an underground parking lot at the Aloha Tower Marketplace's Irwin Park.
In early February, after he began working for Trinity, he participated in a closed-door vote of the Policy Committee that rejected a $6 million offer from Trinity and the developer as settlement for the money owed. Yoshimura later met with several Council members to discuss whether the city should present a counteroffer to settle at $10 million.
"I would have recused myself," Hanneman said....
Yoshimura said he does not believe there is a conflict because his work for Trinity has nothing to do with its situation with the city....
November 15, 1989
VMS, Short on Cash, Shifts Officers
By ERIC N. BERG, SPECIAL TO THE NEW YORK TIMES
In an unexpected announcement, VMS Realty Partners, one of the nation's largest real estate firms, disclosed today that it is suffering cash-flow problems and would replace its top management and lay off some of its 500 employees.
The Chicago-based partnership -which has a $9 billion portfolio that includes the Boca Raton Hotel and Club in Boca Raton, Fla., and the Omni Park Central Hotel in New York -said it would sell properties, seek to renegotiate bank loans and take a $110 million charge against third-quarter earnings.
VMS also announced that Jeffrey J. Park, a 42-year-old executive of the Xerox Corporation, would replace Peter R. Morris as chairman and chief executive, and that Peter T. Cyrus, a VMS vice president, would succeed Joel A. Stone as president.
''The chances of a bankruptcy filing are very, very small,'' Mr. Park said in a telephone interview. ''This is a going concern. I'm not sitting here with my pockets turned inside out.'' He added that VMS had not defaulted on any of its indebtedness, and ''we have liquid assets to meet all our obligations.''
He said that after VMS took the $110 million charge to reflect a write-down in the value of certain properties and receivables, the partnership would have a positive net worth in excess of $300 million. Net worth is the excess of assets over liabilites.
First Disclosure of Problems
It was the first time that VMS, which also has interests in the Four Seasons Hotel in Santa Barbara, Calif., the Caneel Bay resort in the Virgin Islands and a number of high-rise buildings along Wilshire Boulevard in Los Angeles, had disclosed financial difficulties. It cited higher-than-expected expenses and lower-than-expected cash flow from a number of its properties.
VMS, which began as a seller of real estate limited partnerships, has four general partners: Xerox, Robert Van Kampen, Mr. Morris and Mr. Stone. The latter two will remain members of the partnership's executive committee, though they are relinquishing their management positions.
Mr. Park, who was brought in to run VMS largely because of his financial skills, was senior vice president of Xerox's financial-services group and was Xerox's representative to VMS.
Limited partnerships, particularly in real estate, were the principal forms of tax shelters until the Tax Reform Act of 1986 effectively eliminated most of the tax benefits. As a result, a number of syndicators have scaled back their operations sharply, left the syndication business entirely or filed for bankruptcy. They include the Consolidated Capital Corporation, Integrated Resources Inc. and the Balcor Companies.
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APCOA: VULTURES IN THE PARKING LOT
BCCI: THE BANK OF CROOKS & CRIMINALS, INTERNATIONAL.
BEHIND THE BLINDS AT AMERICAN SAVINGS BANK
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BIRDS THAT DRINK FROM CESSPOOLS
CONDOLEEZZA & THE CHICKEN HAWKS
CONFESSIONS OF A WHISTLEBLOWER
DIRTY MONEY, DIRTY POLITICS & BISHOP ESTATE
THE OFFICE OF HAWAIIAN AFFAIRS
MARSH & McLENNAN: THE MARSH BIRDS
THE POWER VAMPIRES & THE GHOST OF KEN LAY
RON REWALD: FLYING HIGH IN HAWAII
THE DEPARTMENT OF HOMELAND SECURITY
THE RISE & FALL OF SUMMIT COMMUNICATIONS
THE SILENCE OF THE WHISTLEBLOWERS
TARNISHED WINGS: THE GREED AT LOCKHEED
THE RISE AND FALL OF SUMMIT COMMUNICATIONS
THE VAMPIRES ON JUPITER ISLAND
THE VULTURES IN MAUNAWILI VALLEY
VULTURES IN THE NATURE CONSERVANCY
VULTURES OF THE SANDWICH ISLES
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Last update January 3, 2005, by The Catbird