Pacific Links Hawai‘i plans to add two more golf courses to its growing collection of links in the state.
The company announced Friday that it is negotiating a purchase of the Royal Ka‘anapali and Ka‘anapali Kai golf courses on Maui from the state Employees’ Retirement System.
If Pacific Links acquires the two adjacent 18-hole courses, it would be the fifth and sixth golf courses bought by the young company with ties to China and Canada.
Formerly known as Hawaiian Golf Properties, Pacific Links made its first Hawaii acquisition in September 2010 with Kapolei Golf Course. It bought Makaha Golf Course West last year, then bought the neighboring Makaha Valley Country Club in March. In May the company bought the 18-hole Olomana Golf Links course in Waimanalo.
The former Luana Hills course in Kailua, now called Royal Hawaiian Golf Club, is managed but not owned by Pacific Links.
Outside Hawaii, affiliates of Pacific Links operate two golf courses in Las Vegas, a course in West Virginia and one in China.
Pacific Links is owned by Chinese entrepreneur and Canadian citizen Du Sha, founder of the 97-store Home World Group, based in China. The company is assembling a network of golf courses in Hawaii, on the mainland and in other countries to attract international members as well as local play. Pacific Links also is the title sponsor of next week’s inaugural PGA Champions Tour 54-hole event at the Kapolei Golf Course.
Bruce Simmonds, CEO of parent company Pacific Links International, said courses on Maui will expand offerings to a premier destination for golf.
"We are sharply focused on providing our members and guests with a link of quality courses around the globe," he said in a statement. "The acquisition of Royal Ka‘anapali and Ka‘anapali Kai, and our expansion to the magnificent island of Maui, would strategically align with this mission and significantly increase our Hawaii portfolio."
The two golf courses are part of Ka‘anapali Resort0 and include about 300 acres of land. Some commercial real estate, including Roy’s Hawaiian Fusion restaurant, is not part of the sale, but would be leased by Pacific Links.
Royal Ka‘anapali is a par-71, 6,700-yard course designed by Robert Trent Jones Sr. It opened in 1962 and has hosted a number of PGA Tour events, including 13 Champions Tour events, the LPGA Kemper Open and the Wendy’s Champions Skins Game.
Ka‘anapali Kai also opened in 1962. The par-70, 6,400-yard course was originally designed by Jack Snyder and was renovated in 2005 by Robin Nelson.
The Employees’ Retirement System acquired the courses in a 2003 foreclosure sale to satisfy a delinquent loan the ERS made to the prior owner of the golf course and Ka‘anapali Resort developer Amfac Hawaii.
The roughly $11 billion pension fund had loaned Amfac more than $66 million in 1991. Amfac filed for bankruptcy in 2002, and the ERS assumed ownership of the golf courses as part of an agreement to settle the debt.
The ERS, which invested roughly $13 million in renovations and has profited from operations, told the Maui County Council in 2010 that it valued the courses at $28 million.
However, the fund under state rules isn’t supposed to hold property acquired in foreclosure for more than five years. The fund obtained a five-year extension on the limit through the governor, and could seek a second extension next year if needed.
Jim Proud, an executive vice president with ERS adviser Heitman Capital Management, said there are better-suited investments for the fund and that a sale after roughly 10 years of ownership should result in an overall positive return on the property.
