Turtle Bay: What Went Wrong and What to Do Now
February 5th, 2009 by Trisha Kehaulani WatsonAm I the only person who remembers when Turtle Bay was a good thing?
I remember family vacations (and reunions) there. The cabanas were the coolest things ever. They had a little pool. I think there were horses. They had those little paddle things you could take out into the bay and paddle around in with your friends.
Turtle Bay used to a place for local people. Local people used to love Turtle Bay.
What happened?
As far as I can tell, the problems with Turtle Bay started in the 1990s when the resort struggled economically. In 1998, the Oaktree Capital Management Corporation of Los Angeles invested $52 million dollars in the resort when it lent a local developer the money to buy the resort and make improvements at the site. Oaktree Capital is commonly referred to as a “vulture fund” for its practice of swooping in and acquiring troubled businesses, like it did in 2001 when moved into Hawai`i again to acquire control of the bankrupt Liberty House. Their treatment of the workers at Turtle Bay led to a very public battle between the company and the Local 5 Union workers.
The Liberty House example became red flag for the Local 5 workers at Turtle Bay Resort. A 2001 Honolulu Advertiser article predicted: “Although it isn’t clear what they (Oaktree) plan to do as owners of Hawai`i’s oldest and largest department store, their investment strategies, as well as analysts’ observations, suggest they may be likely to sell Liberty House in three to five years.” The prediction turns out to precisely accurate in the case of Liberty House, although the time frame was considerably off. Oaktree sold the chain to the Federated Department Stores, Inc. within the year. Federated Departments Stores, Inc., owner of over 400 department stores nationwide, turned Liberty House into Macy’s at the end of 2001. Many local workers lost their jobs. Oaktree netted a profit.
Now Oaktree seemed poised to once again put profit maximization above the needs of the surrounding community. In 2003, the Local 5 Union workers of Turtle Bay voted to support a consumer boycott of the resort, with the vote winning with 92% of the workers in favor of the boycott. Workers of the resort worked without a contract for years. One of the main sticking point in the negotiations appeared to be resort’s unwillingness to grant the resort employees protection from subcontracting. This means, that the resort wanted to reserve the right to subcontract out any of the services or operations of the resort. Subcontracting often leads to a significant loss of jobs for union workers. Other hotels in the state have granted their employees, over 7,000 in total, this protection.
Observers saw the resort’s refusal to place assurances against subcontracting with the union’s collective bargaining agreement another sign of its commitment to profit over community. On the website, www.turtlebayboycott.info, created to provide potential visitors and buyers more information about the boycott, it read:
Oaktree has been spent millions on a cosmetic facelift of the Turtle Bay Resort and is spending millions more on advertising and marketing in an apparent effort to sell the property. Oaktree’s lack of long term commitment to the North Shore community is evidenced by their lack of respect for the Turtle Bay workers. Oaktree’s short term approach may also jeopardize the investments they make on behalf of pension funds, who are responsible for the retirement security of millions of workers.
In 2006, a new agreement was reached with the workers and, at least on that front, all was right with the Turtle Bay world again.
But all wasn't right, and in fact things were about to go from bad to worse...
Within a year of the contract ratification, Oaktree and Kuilima Resort Company would seek approvals for a massive expansion on the North Shore. The community was outraged and protests began against the expansion.
Developers argued for the implementation of a plan approved in 1986 by the State Land Use Commission - 23 years ago. The plan was part of the original reclassification effort which rezoned the impacted area from agriculture to urban resort. Community groups felt a Supplemental Environmental Impact Statement needed to be completed and Keep the North Shore Country filed an injunction to stop the development while their efforts to have a Supplement EIS completed moved forward. The injunction was denied. Defend O`ahu Coalition and numerous other groups are now going before the State Land Use Commission to ask that the land be returned to its original agricultural classification, which would effectively prevent the proposed expansion.
The Defend O`ahu Coalition offers the following justification for their request:
In 1986 the resort developer asked the LUC to reclassify the land in exchange for jobs, affordable housing, and parks to benefit the community . The project was to be started by 1986 and finished by 1996, yet the developers never acted and the agreement with the state seemingly expired. Over twenty years passed; different owners, different management, and different developers each promising additional hotels, parks, and affordable housing to a Ko'olauloa/North Shore community that saw undeveloped lands dwindle, traffic problems increase and an existing property struggling to survive. The housing, jobs, and parks never materialized and yet now the hotel's creditors seek to act on the decades-old agreement which threatens the community with massive development that is wrong for the Country and wrong for our time. This 236 acres of reclassified land is a mere fraction of the existing resort property (currently in foreclosure) and is comprised solely of marshland and a portion of golf course. Returning the land to its original "agriculture" classification would not ruin the existing property, but would send a strong message to speculators and overseas developers that they must keep promises that they make to the people of Hawai'i.
The Land Use Commission meeting will be held Friday, February 6, 2009 at 9 a.m. in Honolulu. The agenda can be found here. The public is being encouraged to attend and voice their opinions on this matter. A map to the meeting site can be found here. The meeting will be held in conference room 204.
More background information can be viewed in the video below or found at the Defend O`ahu Coalition website.
This island has changed a great deal since this development was first approved in 1986. Ewa and Waipahu still had pineapple and sugarcane fields. Arakawa's was still open - so was the Ewa Sugar Mill. O`ahu is not the same place I knew as a child. And our needs have changed as well. In light of the fact that urbanization and gentrification have so radically changed much of Leeward and Central O`ahu, perhaps it is in fact best to keep the country... country.
Tags: Defend Oahu Coalition, Keep the Country Country, Keep the North Shore Country, North Shore, Oaktree, O`ahu, Turtle Bay Report
February 9th, 2009 at 4:50 am
Aloha,
It's nice to hear and see that differing Hawaiian organizations have come together in support of a common cause.
Spent a lot of quality time at the Turtle Bay Resort surfing beside the pool and along the eastern shores that made for a great way to prepare for larger surf moments away along the famed 7 mile stretch of noth shore beaches.
In the mid seventies, the hotel did not hassel surfers and there was a nice vibe between workers, hotel guests and local visitors. I was an awesome location to view surfing looking capturing an umbrella-like view.
Mana. There's a healthy dose of good energy there as the hotel sits atop the point of a lava out crop that is unique.
I brought many island visitors to the shores along the eastern end of the property and shared the beach with very few visitors who were usually fisherman.
Kawela Bay is an awesome location too and hope that more folks will come to utilize and Malama the area while soaking in the good that radiates there.
I am hoping too that the property management team will respect the heiau and burial sites making an effort to identify and ratify archeological issues before crunch time.
Great job to all in support of a worthy cause and one to preserve those lands set aside and indentified as living treasures.
Keep up the great use of video clips to enhance the messages because images and action provide increased awareness where words alone can inadvertently discard vital facts.
Hana hou.
Keep up the great work.
With Aloha,
Moke Young
February 9th, 2009 at 1:19 pm
Please check out my blog for some information that refutes your one sided, pro Union, radical enviroMENTAList take on things.
Be a reporter and not a parrot.
http://keepthenorthshoresane.blogspot.com/
February 11th, 2009 at 9:18 am
A major area employer has to be able to make a profit. At some point, they will say enough is enough! Check with the residents of Molokai and ask how life has changed without Molokai Ranch. So far, we have not become a socialist state.
FHLJ,
Keahi
February 17th, 2009 at 12:22 pm
Let's pretend it is 1997 and YOU are Mr. Oaktree. (Part 1)
(the scene) 1997 - The real estate market in California and Japan is bleak. Both bubbles burst in the early 1990's and the casualties from the fall out include the Pacific Northwest, California and in the pincher of both recessions - Hawaii.
Hawaii's economy is hurting, home prices have declined for at least 6 years and the factors that drove it up - Japanese and primarily California visitors and investors have much larger issues to deal with than leisure market investment options.
Turtle Bay since the big marketing bang of the late 1980's - PGA and LPGA golf tournaments, Jazz Festivals, lavish parties, big plans for expansion has been steadily declining and the place is gradually starting to resemble its nickname "Beirut". Chunks of concrete are falling off the building, the roof leaks, the keiki playground is closed due to hazardous equipment, there is no maintainence budget and both golf courses are suffering from lack of money to take care of priorities. The Japanese owners are out of money, can not execute their development plans because they have no dough, the market is awful and they are doing NOTHING to make the place better. They cut spending to pretty much $0 and put the property up for sale.
YOU are Mr. Oaktree with offices in L.A. and N.Y. sees something come across your desk. "800 plus acres on Oahu for sale. Distressed owner from Japan, needs fixing up, with approvals to build 4 more hotels and 2 condos developments. 27 holes of golf, with potential to have 36 holes".
Interesting.
At this point in time, you Mr. Oaktree have a number of big things to consider. How much do I pay? Can this place be fixed? How much will it cost to be fixed? Will Oahu be an attractive destination again? If I fix it will people come and pay what I need them to pay to make money?
You do not consider that if you do everything you need to do you might not be able to build out the Resort.
We know how this story plays out. You Mr. Oaktree buy the Resort in 1998. It takes 2-3 years to get approvals to start the massive remodeling of the hotel. In 2001, there are cranes in the air and work is going full blast. 9-11-01 is another blow to Hawaii's tourism industry, people are afraid to fly and the economy nose dives.
Mr. Oaktree keeps going, by time he's done. Essentially a new hotel is done, new pools, Lei Lei's, Ola, new 9 holes of golf, 2 remodeled courses, Ocean Villas condos, hiking trails, etc. etc. etc. - $100,000,000 plus in investment.
Now Mr. Oaktree wants to put in infrastructure to build more stuff. The infrastructure will deliver to the 6 zoned parcels water, power, cable, sewer, etc.. The maximum combined number of units is 3,500 as the Unilateral Agreement states. Those are the conditions that he bought the property under, in full compliance with all laws.
In January 2006, UNITE HERE Union Local 5 who was in a labor dispute and boycotting Turtle Bay notifies and starts organizing some North Shore people against Oaktree. UNITE HERE Union Local 5 who was in a labor dispute and boycotting Turtle Bay notifies and starts organizing some North Shore people and organizations against Oaktree and the plan to proceed with the development at Turtle Bay.
The information from Local 5 is distributed and a campaign starts to block the development.
The main point of Defend Oahu Coalition, Keep The North Shore Country and others is that “20 years is too long for a plan to exist. It needs to be reevaluated. It needs a new EIS. Oaktree is dusting off a 20 year old plan. Etc. etc. etc.” The summation of the views of this are expressed by Kevin K in the video of the demonstration from KHON at Turtle Bay 0n 9-5-06 - KHON Monday 9-5-06 - http://www.khnl.com/Global/story.asp?S=5364142
"We don't think you just dust off a 20 year old plan and to ahead with it."
Ironically the “20 Year” argument presented in the guise of rationality by Turtle Bay opponents is the most inaccurate and dangerous statement they make.
The facts as they were outlined earlier show, this plan has been actively going by the current owner since 1997 at the latest.
Turtle Bay’s most current plans started in 1997. That was about 10 years after the Unilateral Agreement was unanimously approved by City Council and 9 years ago. That is actually a small time for a project like this. Any large scale real estate project that requires investment, commitment, plans, construction, engineering, permits, conditions, planning dept. approvals, zoning, architecture, design, etc. has a timeline that resembles Turtle Bay's project. In Hawaii things take even longer than most places. For example, how long would academic projects that merely move minds, people, paper and computers take. Would 3-5 years from conception of an academic project at the University level to starting the program be considered too long? Absolutely not. With Turtle Bay, where the project is infinitely more complicated, are we to believe this timeline is less complicated than a research project?
The people who are opposed to further development at Turtle Bay are so adamant in their desire to stop them that they will do anything, say anything, try anything, partner with anyone and in general resort to any means possible to try and stop Oaktree.
I think that the renunciation of reason, truth and honest/open dialogue over ANY issue is harmful to the future of the North Shore.
There are so many other distortions out there.. If the end justifies the means, I guess people feel like they can say and do anything to get their way. I think that is wrong.
If you oppose Turtle Bay let's know the truth, learn the truth and tell the truth.
Those opposing Turtle Bay, what are your ideas about the property rights that Mr. Oaktree has?
February 18th, 2009 at 7:25 pm
Can someone out there tell me about at least 4 people who WANT the turtle bay expansion and what are their reasons. Im doing a paper and need to find at least 4 or 5 people who are credible and have a different view. Please help. Paper due this Fri. Email if you can. Any info is good info.
February 18th, 2009 at 7:26 pm
Its me again, sorry.. my email address is Chel96730@yahoo.com. Thanks.
February 26th, 2009 at 8:41 pm
There are more recent twists with Oaktree!
Oaktree Capital's billionaires CEO, Howard Marks & President Bruce Karsh are both BIG-TIME Obama fundraisers & donors. This is potentially politically embarrassing for our Hawaii-loving, Environmentalist president –[Check internet folks this is well documented in LA Times, WSJ, etc]
We would like a new Era of Integrity in Politics & Business! Does Obama know who these Big-Donors are that are cozying up to him & how their huge development at Turtle Bay will ruin the North Shore & Ko'olau Loa- the COUNTRY ?
Obama visited Turtle Bay when we was in Oahu on Christmas vacation. ALL our mainstream press was repeated contacted about the Obama/OaktreeCapital/Turtle Bay connection, but none of the media choose to report on it--- yet?
{Ex: http://articles.latimes.com/2008/oct/21/natio... http://www.ibabuzz.com/politics/2008/12/15/ca... http://hollywoodinsider.ew.com/2008/09/obamas... http://www.asianamericansforobama.com/dinner-
Funny, the press is quoting Stanford Carr and seems to be implying that Oaktree Capital is no longer in the Turtle Bay deal ? But in the LPGA/ SBS OPEN at Turtle Bay Resort Volunteer Registration Form for Feb 11-14, 2009 http://www.sbsopen.com/media/volunteer_formSBS09.doc... Oaktree Capital is clearly listed and seems to still be the owner.
Stay Tuned !