Layoffs at resort might violate law

The state Department of Labor and Industrial Relations has scheduled a rapid response team Tuesday to help 95 workers being laid off Oct. 31 by the Makaha Resort & Spa and is determining whether the company must pay eligible workers for an additional four weeks.

DLIR is looking into whether the 300-acre resort — closing indefinitely after failing to secure financing for a planned renovation — violated Hawaii’s Dislocated Workers Law, which requires employers give workers 60 days’ notice of plant closings and mass layoffs or face penalties of up to $500 a day.

If the law applies to the resort owned by Canadian-based Northwynd Properties Ltd., the company would be required to pay eligible workers the difference between employees’ average wages and weekly unemployment benefits, which for most full-time low-wage workers is about 62 percent of previous wages, DLIR said.

The payments would supplement unemployment benefits for a maximum of four weeks.

"At this point our focus is on the well-being of the Makaha Resort workers and their families," Dwight Takamine, DLIR director, said in a statement. "It is unclear whether or not Hawaii’s Dislocated Worker Law applies to this situation, but we are in the process of ascertaining whether the department has jurisdiction in this matter."

Pat Fitzsimonds, Northwynd’s CEO, said the company will adhere to the law if it applies in this situation.

Fitzsimonds, who spoke by phone from Calgary, Alberta, said he is closing the resort because he was unable to arrange financing for renovations he had hoped to do. Fitzsimonds said he is still working to find the money and will carry out renovations as soon as he does.

Fitzsimonds said while there is no guarantee of employment after renovations, "clearly it’s our intent to rehire those folks."

"In light of economic times and the fact things just seem to take longer, I’m reluctant to make too many commitments today," he said. "It’s certainly my hope that we are open again in the first quarter of next year."

The company isn’t offering severance or retraining money to laid-off workers.

Fitzsimonds described the situation as unfortunate and said previous construction schedules were delayed because of financing issues. The company is close to securing money for renovations through at least two prospective groups from Hawaii and Canada, Fitzsimonds said.

Northwynd, which announced in April that it had sold its adjacent golf course to Hawaiian Golf Properties LLC to pay for improvements to the 173-room hotel, obtained a $6 million loan through the sale. It needs another $6 million for a total of $12 million in capital to make over the aged resort nestled deep in scenic Makaha Valley, Fitzsimonds said.

The 18-hole golf course closed for renovations on May 14. Hawaiian Golf plans to spend more than $10 million on renovations to the course being designed by Greg Norman, according to Fitzsimonds.

Northwynd took ownership of Makaha Resort in July 2010 when it acquired the assets of another Canadian firm, Fairmont Resort Properties Ltd., through a court-supervised debt restructuring. The company hasn’t invested any money in the property since, Fitzsimonds said.

"It’s tired, and we’ve known that for quite some time. It’s been my vision and my plan to secure the capital to remodel it," Fitzsimonds said, adding that there has been no reinvestment in the resort for at least a decade. "Most of the work we need to do there for the most part is cosmetic. The basics of the resort are in very good shape."

If financing is secured, Northwynd plans to convert the hotel into 102 luxury time-share apartments.

Fitzsimonds said the company’s intention is to contribute to the local economy through redevelopment of the resort and subsequently attract several thousand Canadians every year to "help stimulate the economy."

Northwynd has 27,000 members in its two time-share properties in Canada, he said.

For the time being, however, the West Oahu workers will be left jobless with limited prospects in an area with one of the state’s highest unemployment rates.

"It’s a difficult situation; we know it, too. It is our clear intent to solve this problem," Fitzsimonds said. "We want to be part of your island, good corporate citizens there. We want to contribute to that economy, not take away from it. The best thing we could do is get our financing established as quickly as we can and hire them back. We’re trying our hardest."