New Owners For Marc Resorts

HONOLULU— It will be interesting to watch what Phoenix-based Heller-White Hotel Management LLC and a team of other investors have in mind for newly acquired Marc Resorts Hawaii. For starters, not only has Heller-White Hotel Management LLC and its predecessor, Heller-White Hotels Co., been engaged in the management and operation of hotels and resorts for more than 20 years, but the 23-year-old organization’s background similarly includes experience in the Hawaiian marketplace among other geographical areas of operation. Additionally, Heller-White has built something of a reputation in the area of turnarounds for troubled properties, reportedly including those of major chain operations. And while there wasn’t any overt indication of economic duress impacting Marc Resorts Hawaii specifically, that company’s president, Matthew Delaney, nonetheless noted the hotels were purchased from Sunterra Corp. during Chapter 11 bankruptcy reorganization. Management of small hotels and condos were not a core business for Sunterra, one of the world’s largest timeshare operators. In fact, Marc Resorts and Delaney’s handling of the company actually drew praise from Mitchell Heller, co-managing member of the LLC and co-founder of Heller – White. As he contended: “Delaney’s team has done a tremendous job [of]transforming Marc Resorts into a very successful company that has been able to survive… even in these difficult times.” It was said that while other hotels and resorts in Hawaii have “suffered greatly” during recent times, Marc Resorts reportedly maintained an above average occupancy rate and financial stability. Over the course of the first six months of this year, Marc Resorts reported an occupancy rate of 82%. According to Delaney: “The acquisition will provide the capital, stability and resources Marc Resorts needs to grow within Hawaii’s very competitive hotel industry.” He further indicated Marc Resorts would diversify into full-service hotel-management in addition to its traditional resort condominium-management role. Timing-wise, Delaney further pointed out Heller – White was anxious to get back into the Hawaii hotel market. As such, Delaney himself is well-positioned to help Heller – White do just that as he continues to oversee the operation of Marc Resorts via his responsibilities as one of the participating partners of the new ownership group. To this end, Heller himself maintained ownership looks forward to working with Marc Resorts’ head office here and its “on-site management teams to further enhance guest service and profits for our property owners.” Delaney explained this means all involved are determined “to improve the levels of service, quality of the properties, and returns to the owners.” Long-term, Delaney said the group’s new ownership “would like to grow into the full-service hotel aspect, where their particular expertise is, in addition to growing the current resort condominium business.” It was noted that, since opening its initial property in Waikiki in 1987, Marc Resorts Hawaii has grown to include 15 properties throughout the Hawaiian Islands and has similarly become “a leader in the growing boutique-style [of]hotels” though it offers a variety of accommodations, including deluxe hotels, condos and all-suite resorts. Founded by Mike Paulin, the company was privately held until it was sold to Sunterra Corp. in the fall of 1997. At that juncture, it became a wholly-owned subsidiary of that public company. According to Delaney, “a future IPO is a possibility… but right now the plan is to remain privately held” as Heller – White strives to grow into the full-service hotel aspect (described as their particular area of expertise) in addition to expanding the current resort condominium business. Pacific Area Realty Ltd. of Honolulu assisted the Heller – White lead investor group in evaluating and negotiating the recent Marc Resorts Hawaii purchase. As for financial details of the transaction, Delaney said: