Lender acquires control of West Maui retail center

Maui shopping center Lahaina Gateway has been repossessed by a lender for a second time in two years, giving the property its fourth owner since opening five years ago.

An affiliate of New York-based investment firm Torchlight Investors acquired the 137,000-square-foot center on leasehold land from California-based investment firm Strategic Retail Trust Inc. in lieu of foreclosure.

Lahaina Gateway is the largest retail complex in West Maui and is anchored by Foodland Farms, Barnes & Noble Booksellers and Office Max. About 75 percent of the center is occupied, according to the center’s website.

Strategic Retail, formerly known as TNP Strategic Retail Trust, bought Lahaina Gateway for $32 million from Central Pacific Bank in November, two months after the bank repossessed the property from its original developer, Bilarjo LLC, in foreclosure.

Strategic Retail financed its purchase with a $29 million loan from the Torchlight affiliate. That loan went into default in January, according to a Strategic Retail filing with the Securities and Exchange Commission. Strategic Retail cured the default but agreed to turn the property over to the lender after projecting that annual expenses for Lahaina Gateway would exceed revenue by $1 million.

The Torchlight affiliate, DOF IV Lahaina LLC, completed the repossession Aug. 1, according to property rec­ords.

Plans for the project created excitement in 2006 with the announcement that it would be anchored by Hawaii’s first Cost Plus World Market store. But Cost Plus canceled its plans, and Bilarjo experienced financial difficulties after the $47 million center opened in 2008 in the face of a recession.