Marriott, in response to trying market conditions, has revised aspects of its construction schedule for the $1.4 billion Kaua‘i Lagoons resort project.
Following several other similar major project revisions in Hawai‘i in recent months, Marriott representatives expressed little concern over their change in schedule.
Speaking at the Kaua‘i Lagoons Sales Gallery at the Marriott, Project Director of Sales James Barry said that, when viewed in the context of the scope and timeline of the original master plan, the revision is a minor one.
Marriott’s master plan calls for the construction of roughly 400 Marriott and Ritz-Carlton residential units over a several-year period. The building of 87 of those units — which Marriott had originally hoped to complete in 2009 — have now been bumped to 2010.
“We’re certainly not shutting down,” Barry said. “The construction is just temporarily postponed.” He added, “It’s a multi-year sales project, and selling will be going on for probably another decade.”
Speaking by phone from Orlando, Fla., home-base of Marriott Vacation Club International and the Ritz-Carlton Club, vice president of corporate affairs and brand awareness Ed Kinney framed the “construction realignment” in a positive light.
“We’re talking about taking the opportunity, based on the economic conditions, to suspend vertical operations,” he said, adding that Marriott was continuing with sales operations without interruption.
He said that as a company with a reponsibility to its shareholders, Marriott — whose Ritz-Carlton real estate component is the Ritz-Carlton Development Company — must be cognizant of changing economic conditions and be willing to revise aspects of its construction plans accordingly.
“I don’t think anybody, whatever business you’re in, be it widgets or whatever, could have anticipated the economic situation,” Kinney said.
Kinney made clear that other aspects of the development’s construction — site grading, utilities, easements, landscaping and drainage — would continue, and that the completion of the Ritz-Carlton “Building A” and surrounding amenities would be completed by January 2009 as originally planned.
Kinney said that construction on the rest of the units is planned to resume in early 2010, and that Marriott remains committed to see the ambitious plan to its completion.
Also responding to revised market and sales predictions, construction of the roughly 1,000-acre Kukui‘ula construction project has been considered in a new light. But according to President of Kukui‘ula Development Company Richard Holtzman, although his company has adjusted its business plan, it is currently “continuing the construction model on pace.”
Holtzman admitted that sales are below the expectation his company had two years ago.
“We may be stretching out development activities in terms of subdivisions,” he said. He added that Kukui‘ula will bring “less residential product on” than had been planned in earlier years. But he said that the development’s amenities — including an 18-hole golf course, club house, golf shop, spa, pool, and fitness studio and “event lot,” — would be completed on schedule in 2011.
Both Kinney of Marriott and Holtzman of Kukui‘ula said that, regardless of the recent schedule shifts, long-term development plans and sales goals remain unchanged.