County Council Didn’t Do Their Homework

by Lawrence K. Burke

Members of our County Land Use Committee didn’t do their homework. The 1800 acre Makena Resort Developer, Dowling, stands to make a tidy profit on his investment and troubled Morgan Stanley Real Estate much more. Morgan Stanley is in no position to negotiate the future of Makena through their representative Dowling. In today’s economic tough times with tight credit, big reduction in land values and Morgan Stanley near collapse, Morgan Stanley would be fortunate if the State bought their Makena property as parkland.

Typically, developers try to reduce the risk on a project by getting all the approvals and permits lined up and doing phased-in construction. Developers want to limit the up front investment in the project and usually make their money on the later phases of home building and upgrades. The seven members of the committee are mistaken to believe that during the recession Dowling will build many estates and create jobs for the construction and ancillary industries.

We’re leaving the environment versus jobs trade-off to Dowling. Once Makena Resort is built we can’t go back. There are ample examples of exclusive gated communities like Makena Resort on the mainland and they are approved with long careful scrutiny and built in areas far away from national treasurers like Makena. Developers usually pay for road improvements. Each household built by Dowling with produce around 8 trips a day clogging transportation.

The developer and investors of Makena Resort want to sell mansions for over $14 million and create a play land for the ultra affluent. The people they are appealing to demand private everything: golf courses, beach clubs, and gated communities. The last thing the super rich want is to integrate into the community. This is in contradiction to our Community Plan, page 29, that says all large residential projects should provide a mix of affordable and market-priced housing. The council should uphold policies of the Community Plan and not created their own ones.

Rather than spend $20 million of tax money on constructing of a Pi’ilani highway extension out to the very wealthy, the Council should set that money aside for the adequate extension of Makena State Park. Governor Lingle announced in her 2008 State of the State Address a proposal to buy Turtle Bay. For the same reason the State should buy the Makena Resort area from financially strapped Morgan Stanley. The endangered sea life and flora, exception scenic beauty, superlative public recreation, rich cultural and historic significance of the Makena area meet the criteria for selection as an enhanced State Park.

At the height of the real estate boom Morgan Stanley unwisely paid $575 million for the Makena Resort. The state could wait one year to the depth of the recession and pick up the $575 million resort for much less before Morgan Stanley defaults on their loan paying less than the proposed turtle bay acquisition. The State can raise money by reselling a portion of the resort after the recession, teaming up with conservation trusts and wealthy philanthropist and even mounting a worldwide Internet fundraiser since Makena is world renowned. If funds fall short of the goal, than as a compromise deal with Morgan Stanley, the State could buy a portion of the most environmentally sensitive areas with the money it raised.

Giving into a developer for the prosperity of the construction industry during a recession is shortsighted. Wealthy gated estates out to Makena and affordable suburban sprawl in Kihei is 1970s thinking. Modern community design calls for integrated living away from ecological treasures. It’s time that the Council works toward giving Makena the respect she deserves as a larger State Park. This way Maui’s people, can continue to preserve, protect and share world class Makena for many years to come.

About the author: Lawrence K. Burke is a Principal in The Makena Group sustainability consultants and publisher of the Green Maui Guide. He has an MBA from Harvard University and a BA in Economic from Stanford University. He is a nine year resident of Kihei.

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