By CANDACE JACKSON

Hualalai Resort

Hualalai's private club house -- membership costs a $225,000 deposit plus $28,000 in annual fees.

Kohala, Hawaii

Over the last decade, one of the most exclusive gated communities in the country emerged here, carved out of the bleak, lava landscape that dominates the west side of Hawaii's Big Island.

Visitors allowed past the gate-booth of Hualalai (pronounced ha-WAH-la-lye) enter an ersatz Hawaiian paradise of elaborate swimming pools, coconut body scrubs and butter-poached Kona lobster. Residents, who include Charles Schwab and Michael Dell, scoot around the property on private golf carts. And at the property's Four Seasons hotel, guests like Leonardo DiCaprio, Julia Roberts and Denzel Washington spend a minimum of $800 a night -- one of the highest room rates in the state -- for bungalow-style rooms and a staff that spritzes sunbathers with Evian and will even shine their sunglasses.

But Hualalai and its gated neighbor Kukio, emerging meccas for the very rich, haven't proved immune from the recession. The hotel, which is undergoing renovations, offered fourth-night-free discounts in the fall amid an island-wide tourism slump. Buying in the community, where prices start at $1.8 million for an attached condominium, used to mean joining a two-year waiting list, says Gabe Winkler, a local real estate appraiser. Now there are 50 homes and lots on the market, double the number last year. Sales volume this year is expected to total about $115 million, half of 2007's record sales volume.

"Buyers even in high-end exclusive club or resort communities are saying 'I want a deal,' " says Sam Ainslie, Kukio's president.

While wealthier communities were initially faring better in the housing downturn, the recent financial crisis is taking its toll on expensive resort areas. In Aspen, Colo., brokers say prices have softened anywhere from 10% to 15%. Mary Taaffee, a real-estate broker in Nantucket, Mass., estimates prices are down about 10% to 12%.

Brokers in Hualalai, which was purchased by Mr. Dell's private investment firm and investment management company Rockpoint Group in 2006, say the slowdown has been most dramatic at the lower end -- homes that sell for under $3 million. According to Rob Kildow, Hualalai's principal broker, sales at the higher-end continue, though at a slower pace. The last month, he says, has included the sale of a $9.175 million home and an $11.5 million home. A $17.25 million home is set to close soon, purchased by a real-estate executive from New York.

 

Hawaiian Getaway Boasts Amenities Galore -- for a Price

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The Hualalai Resort, on the Big Island, offers everything from saltwater snorkeling to golf and a residential gas station. As Candace Jackson reports, the condos start at $1.8 million.

On this rocky stretch of lava, extreme physical isolation and high price tags allow the rich to feel at home. Surrounded by a lava field and fronted by a manned gate, Hualalai has emerged as something of an out-of-state country club for multimillionaires.

After buying a home, residents then must join the private club restricted to homeowners in order to access the resort's amenities. Once accepted, there's a $225,000 deposit plus $28,000 in annual fees. Membership comes with access to the hotel's saltwater snorkeling pond, infinity pools, private restaurants and two private golf courses, including one that's only open to members and doesn't require tee times.

Restaurant waiters say they frequently push tables together to accommodate impromptu dinner parties for friends who bump into each other. The community's four full-time concierges say they're often asked to print up a list of who's on property in a given week so members can call their friends right when they arrive.

Every Monday night around sunset, residents gather at a private beach club overlooking the ocean for an event regulars call the "merry moochers," where couples snack on shrimp bruschetta and drink free mai tais.

Waiters know their customers by name. "When I go any place [on the property], I am a queen," says Becky Holman, a Denver painter who lives at Hualalai about six months a year. "We know everybody."

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Hualalai Realty

A 4,700-square-foot four-bedroom, four-and-ahalf bath Hualalai
residence overlooking the golf course and the ocean. Asking $8.75 million; furnishings included in price.

Homeowners say they've noticed few changes since the onset of the recession. One homeowner says everyone in the community knows certain residents have lost wealth. But everyone's still flying in for the holidays and throwing the usual Christmas parties.

With 290 members and a busy 243-room hotel, Hualalai grew a little too large for some members' liking. So in 1999 several Hualalai members got together with developers to form Kukio, an adjacent gated community that vowed even more exclusivity and even higher prices.

"Hualalai became a victim of their own success," says Michael S. Meldman, CEO of Discovery Land Co., which operates Kukio with financial partners. With a maximum of 197 members and no hotel, Kukio is "more like being at home," he says. The cost of being at home here starts at $4 million. (Jeremy Sosner, Hualalai's director of marketing, says the hotel helps support more amenities and that members "enjoy the vitality that the hotel guests bring.")

A few members from Hualalai and Kukio from the Bay Area got together to form a private flying club to get to and from the Oakland Airport, called the Kona Shuttle. For $100,000 members get up to 50 round-trip flights on an all-first-class 757 or 727 that seats 60 passengers. Flights operate on Thursdays and Sundays.

One new Hualalai owner, John Guiltinan, of Newport Beach, Calif., bought a place in Hualalai in May. The shopping-center developer says he and his wife were drawn by the golf and the networking potential at Hualalai, and reports that they've already made friends with five or six couples. "There's more personal association," at Hualalai, he says.

The snag: he still hasn't been able to sell his first home on the island. "It's tough times right now."