OAHU, HI-Canyon Capital Realty Advisors of Los Angeles and California Mortgage and Realty of San Francisco have funded a $97.9-million senior bridge loan to Halekua Development Corp., a Chapter 7 debtor redeeming its own property from its bankruptcy estate. Canyon Capital funded a $55-million senior tranche and California Mortgage and Realty funded a $42.9-million junior tranche in the loan.

Backed by 161 acres of residential zoned land on the hillside here overlooking Pearl Harbor, the loan will repay all of HDC's secured creditors, and provide approximately $20 million for pre-development expenses and infrastructure for Royal Kunia Phase II, the residential development long planned for the property.

Slated for 2,600 housing homes and apartments, Royal Kunia Phase II stalled in 2003 when HDC filed for bankruptcy. In August 2006, HDC owner Herbert Horita reclaimed the property by being the high bidder at the bankruptcy auction. He bid $50.2 million, $100,000 more than local homebuilder Stanford Carr Development, which HDC has since tapped to serve as project manager for the pre-development and portions of the project. The first residential units are expected to be ready for sale by late 2009.

Horita has built some 13,500 homes in Hawaii. HDC was the original developer of Ko Olina, Royal Kunia Phase I (through a joint venture with Castle & Cooke) and Village Park. In a prepared statement, Horita said he is "very gratified to be given this new opportunity to resume what has been my life's work: the building of homes for Hawaii's working class families."