We have been saying for several months that the direct impact of the issues facing the credit markets on Maui has been small. That is no longer the case.

 Maui Land & Pineapple Co. and its partners in the Kapalua Bay Hotel redevelopment have had to advance money to pay contractors after losing financing from the bankrupt Lehman Brothers. Lehman had an agreement to loan $370 million for the project, or 61.6 percent of the total cost. But the investment firm filed for bankruptcy Sept. 15, a week before it had been scheduled to release the next funding installment. Other lenders provided 22 percent of the payment, but Lehman failed to release its share, or $27.7 million, according to a disclosure ML&P filed Friday with the Securities and Exchange Commission.

 While our guess is that this will not slow down the completion of that project, other new projects on Maui are clearly being affected:

  Developer Everett Dowling, who is pursuing the expansion of Makena Resort, said he plans to complete projects that are already under way. But he has shelved proposals for new projects because of the difficulty in getting financing for resort developments, and because financing costs more when it is available.

What does this mean for Maui real estate? Less new product for buyers to choose from, fewer construction jobs and some cushion on high end values.