Coco Palms doubts rising

  • Dennis Fujimoto / The Garden Island

    What once was the stately Coco Palms Resort across Kuhio Highway from Wailua Beach is now a shell awaiting final demolition before a planned rebuild.

  • Dennis Fujimoto / The Garden Island

    The fence stands where once was an elegant entrance to a porte cochere where the original Flowers Forever shop and numerous other shops once thrived. The overgrown entry to Coco Palms Resort in Wailua is today barely recognizable.

WAILUA — The partially demolished, disemboweled skeleton of the Coco Palms Resort sits just mauka of Kuhio Highway in Wailua, seemingly still frozen in death after being killed by Hurricane Iniki in 1992.

Sporadically over the last 18 months or so, demolition crews have stripped the detritus from six reinforced concrete building shells, including plentiful amounts of asbestos that sat unaltered since the resort was devastated in the hurricane, never to reopen. Other structures — including the bungalow said to be favored by singer Elvis Presley in his occasional stays at Coco Palms — have vanished without a trace.

But increasingly, patience is growing thin within county government and the community for the project to rebuild Coco Palms and restore it to whatever glory it once enjoyed.

The Garden Island asked a half-dozen current and former officials in county and state government to weigh in on when — if ever — the reconstruction of Coco Palms will be finished. While only one of them would speak for attribution, all agreed that concerns have risen that the project will never see completion. The skepticism remains and appears to be growing despite insistence from the developers that while there have been delays, Coco Palms will indeed rise again.

County Councilmember JoAnn Yukimura was the only past or present government official willing to speak for attribution, but her views were representative of others.

“I draw my conclusions based on performance thus far: lots of talk but nothing to actually show,” Yukimura said. “As difficult as it is, it appears we need to hold close and honor our memories of beloved Coco Palms, but let go of the idea of bringing those days back.

“Instead, we should contemplate what the next life of that site is and work together to make something wonderful happen.”

Yukimura noted that proposals have floated from time to time for the Coco Palms property to be converted to park land, with its salvageable building frames repurposed as affordable or kupuna housing.“It may be time for that now,” she said.

Coco Palms Hui

Coco Palms Hui, an Oahu-based limited liability corporation, formed in 2014 to acquire and rebuild the Coco Palms property. Announced dates for rebuilding and reopening the hotel slipped from 2015 to 2017. More recently, Coco Palms Hui has said it intends to begin construction sometime next year with reopening projected for 2019 or 2020. Coco Palms Hui exists under the business umbrella of the Greene Waters Group, a Honolulu real estate developer.

Like most companies in its business, Greene Waters Group has an inconsistent record of delivering on its development promises. Its website, for example, identifies an Oahu Hotel called the Endless Summer Resort as opening this year. The property, according to the website, is to include a gigantic, artificial surf-generating pool.

But as this is written, the Endless Summer Resort still lacks a site, much less evidence of construction and no word on an opening date. Coco Palms Hui said its plans for the surfing hotel are on hold indefinitely, until it finished construction on and reopens Coco Palms.

The firm said its financing and construction plans are on target. Kauai County officials said Coco Palms currently has 24 pending building permit applications on file.

“Although the Kauai of 2017 may be vastly different from the Kauai of 1992,” said Tyler Greene, one of the two principals in Coco Palms Hui, “we believe that Coco Palms will fit wonderfully into the contemporary tourist economy of the island.

“A development of this magnitude has many challenges and obstacles and often takes much longer than desired or expected. We are proud of the progress we have made to date and grateful for the community, county and all the folks that have stood beside us. We are confident Coco Palms will be rebuilt.”

County’s role

The county has a great deal at stake in developments concerning any Coco Palms reconstruction. It has struggled for more than a quarter-century with an eyesore that is widely seen as a blight on the image of Kauai, especially for visitors who are heading north on Kuhio Highway after arriving at Lihue Airport.

Yet the county — and the state, for that matter — lack funds to buy the property outright and identify a viable adaptive reuse.

Because of that reality, Mayor Bernard Carvalho Jr. chose a measured tone when asked what he thought would become of Coco Palms.

Said Carvalho: “I join the community in their desire to see this site improved. The property has changed owners several times over the past 25 years and no one has yet been successful in redeveloping the property, which has been understandably frustrating for our residents.

“I have supported the efforts of the current owners to restore the property using the same footprint as the original Coco Palms. They have successfully completed the demolition process and disposal of hazardous materials, and they are now in the process of obtaining building permits. These permits do require the developer to hit certain benchmarks to ensure that the project moves forward in a timely manner.

“We’re hopeful that the developers will be successful in their efforts and I believe it would be premature at this time to discuss alternate projects for the site.”

Construction concerns

As the project sits idle, however, concerns have arisen about numerous aspects of the reconstruction:

w Although Coco Palms’ building permits are still under review, the county’s Engineering Division has concluded that the entire Coco Palms site is within the floodplain that could be inundated during a hurricane or tsunami. Although Coco Palms is permitted to rebuild on its original footprint, the resort must still comply with flood abatement standards in the current County Code.

Those standards are more stringent than they were in 1992. The code would require that any spaces at ground level — which were in use as hotel rooms in the original resort, could not house guest accommodations or would have to be completely flood-proofed.

Responding to a series of questions form TGI, Greene said: “All rooms will comply with relevant federal, state and county regulations.”

w The Kauai hotel economy of 2017 is vastly different from what obtained when Coco Palms was last in operation.

In 2014, Coco Palms Hui and Hyatt Hotels Corp. announced that Hyatt would manage the new hotel. Later, Hyatt said Coco Palms would be one of its “Unbound Collection” properties. In a 2016 news release, Hyatt described the collection as “a portfolio of new and existing upper-upscale and luxury properties.” Coco Palms Hui said “our agreement with Hyatt is confidential.”

However, asked to describe the market niche a reopened Coco Palms would occupy, Greene said it would be “a 3.5 star hotel” on a five-star scale. According to online hotel reservation provider Orbitz, that rating would be consistent with “mid-scale, convenience plus comfort.”

The difference could be critical since a newly constructed Marriott Courtyard hotel opened a few months ago just north of Coco Palms and a Hilton Garden Inn took over a renovated property just south of Coco Palms. Both hotels offer rooms in the $135 to $200 per night range and each is beachfront, away from Kuhio Highway and not subject to substantial traffic noise.

Greene declined to specify the rate schedule at a rebuilt Coco Palms. He said rates would be set by Hyatt once construction is complete. All the company would say of its plans for Coco Palms, however, was that “Hyatt does have a development agreement in place to manage the hotel. We do not have further details to share.”

w The state Department of Transportation has announced construction of an additional lane of Kuhio Highway directly in front of Coco Palms, which will bring the highway significantly closer to the hotel than is currently the case. The County Code does not require noise abatement measures, like sound walls.

Coco Palms Hui said “our architects, engineers and consultants will have appropriate sound mitigation measures built into the design.”

w Unlike its nearby competitors, Coco Palms will not have direct access to any beach. The beach across the highway from the hotel is comparatively narrow. Traffic volumes on Kuhio Highway are significantly greater than when Coco Palms was in operation.

In the past, Coco Palms has said it would address beach access issues by providing shuttle service, but not by construction of an overpass for guest use. In his responses to questions from TGI, Greene said “we are continuously evaluating beach access issues and will work to implement what we believe will provide the guest with the best hotel experience.”

Greene discounted doubts created by traffic noise and beach access.

“We believe in the appeal to Coco Palms and it being a beacon for old-style Hawaiian hospitality,” he said. “This will permeate the resort and will attract the guests we are hoping for. We have programs in place for both the traffic noise and for comfortable beach access.”

Financing questions

It remains unclear whether Coco Palms Hui has full financing in place to proceed with construction.

“The final mix of investors will be a combination of individual and corporate entities,” Greene said. “The current project cost is $140 million.”

Asked to identify the investors, Greene said, “As a matter of standard practice, we don’t release investor information.”

Information available in public records, however, suggests that Coco Palms Hui has struggled so far to attract investor support. In 2014, for example, Coco Palms Hui filed with the U.S. Securities and Exchange Commission to offer eligibility for U.S. visas in exchange for investment commitments of at least $500,000 by non-U.S. citizens. The program was intended to produce $28 million in investor commitments, according to the SEC filing, although only $1 million had actually been raised.

The filing also noted that BPG Hawaii LLC, another entity owned by Greene and Chad Waters, the other principal in Coco Palms Hui, intended to collect $800,000 in sales commissions and finders fees from the $28 million offering. How much the visa-for-cash offer produced is not known.

Though Coco Palms Hui declined to release information on its investors, a 2016 article in Pacific Business News quoted Greene as saying “Giving the community an opportunity to take an ownership share of this majestic place is important to us.”

To raise the capital necessary to proceed with demolition, Coco Palms Hui obtained a loan from Utah-based Private Capital Group, LLC., which specializes in investments in distressed properties. The company’s website says it is interested in “foreclosed or distressed commercial and residential developments that may require improvements, construction or rehabilitation.”

Coco Palms Hui declined to disclose the terms of its financing from PCG, but federal court records indicate that the firm has been involved — in some capacity — in 24 cases in U.S. Bankruptcy Court and eight other federal court cases. In one case that attracted media scrutiny, PCG sued a professional football player, whom they accused of defaulting on a $1.3 million loan.

The player, Marcell Dareus, who currently plays for the Jacksonville Jaguars, claimed that an imposter had actually applied for and received the loan. In 2016, a Utah federal judge dismissed PCJ’s suit against Dareus “with prejudice,” which barred PCG from trying to file a new case against Dareus. This raises into question PCG’s due diligence in assessing the financial positions of those to whom it makes loans.

Ownership dispute

Coco Palms has also struggled with the occupation of some of the property by a group of Native Hawaiians and other people who contend they hold rightful title to the land on which the resort would be reconstructed. Coco Palms Hui and the county attorney contend the occupation is illegal, but the small group continues to occupy the property. Forcible eviction of the occupiers — regardless of the legal merits of their status — could trigger a backlash in the Native Hawaiian community.

Some of the occupiers have been residing on the Coco Palms property for more than a year. A trial in Fifth Circuit District Court is set for Dec. 20.

Greene declined to say what Coco Palms Hui might do about the occupation — whether it wins or loses at trial.

“It would not be appropriate for us to comment on a pending legal action,” Greene said.

Coco Palms legacy

Yet the troubled current state of the Coco Palms project also seems to mask another debate — about what memory of Coco Palms is to be preserved or renewed by a hotel that might open in two or three years, or not at all.

Many longtime Kauai residents who knew Coco Palms well in its heyday say now that, by the time Hurricane Iniki struck, the resort was already well past its prime. The abandoned hulk of the hotel remained after the hurricane not because of the scale of the damage, but because Coco Palms lacked adequate insurance to rebuild.

Said Greene: “Although the property may have suffered pre-Iniki due to lack of capital improvement, the meaning of Coco Palms did not. Our followers seem to be more focused on the meaning and spirit behind the resort and are confident that we will bring that back.”

What Coco Palms Hui sees as the mystique of the property is driven to some degree by the memory of Presley, who visited the hotel frequently in its glory days and shot a movie there. Linda Deutsch, a legendary — now retired — reporter with The Associated Press in Los Angeles recalled that, as a teenager, she was national president of the Elvis Presley Fan Club.

But Deutsch said that modern-day fans no longer see Coco Palms as part of his legend. Connection with place for Elvis fans, Deutsch said is limited these days to Graceland, his mansion in Memphis.

However, Greene sees it another way. “Elvis Presley was and always will be connected to the Coco Palms Resort,” he said.

That may mean that the future of Coco Palms may hinge on whether it is true or not that, as the old saying about Presley goes: “Elvis has left the building.”

•••

Allan Parachini is a former journalist and PR executive. He is a Kilauea resident.

23 Comments
  1. John Zwiebel December 10, 2017 7:19 am Reply

    This reminds me of the Trump Tower in Panama where apartments were sold to investors who never moved in. A great way to launder money.

    No one in their right mind would ever book a room at a place that has the highway traffic inches from their window and no access to a beach.

    The county should use eminent domain to take over the site and then consider tearing it all down.


  2. Yolanda Oglesby December 10, 2017 7:20 am Reply

    Thank you for this detailed update. We visited Coco Palms for dinner and a show in the late 70’s. Would love to see it back up and running and like the idea of old Hawaiian style and hospitality. Hope everything can get resolved soon. Best wishes.


  3. Lee December 10, 2017 9:16 am Reply

    Great research.


  4. Charlie Chimknee December 10, 2017 9:40 am Reply

    With 1/2 tongue in cheek…

    Aloha Kakou,

    Convert CoCo Palms into a Giant 7 days a week Flea Market something akin to the Honolulu Stadium one. Charge a small fee to vendors that would pay for painting the weathered concrete with attractive bright colors, put up super safe (taller than code) no rust railings on the upper floor(s)?, restore adequate enough bathrooms for the public; restore the gardens and landscaping; let Kaua‘i residents and visitors roam the Old CoCo Palms grounds with “reported” sightings of our King Kaumualii, and Elvis too.

    Forget the Koi, run a pipe and stock the ponds with sea water and moi and let the keiki come down and for a change and get their folks dinner with hook and line.

    Let there be aspiring musical artists playing traditional Hawaiian Music for all of us and visitors “alike” to hear; including school bands too. Maintain the beautiful Hawaiian Culture we love.

    Let there be ready in place multi IMU areas for families to enjoy traditional meals with picnic tables and small coconut palm thatched hale over them.

    Clean up the green waste in the coconut grove and call it the CoCoNut Grove with local live evening entertainment.

    Build an Alii Hale for Bernard so he no have to go LIHUE no more…! ! !

    This is what you can call community pride and let the hui that is only renting the CoCo Palms land from the state pay the water and electric for the Hawaiian Pride “temporary” Market Place for the right to keep talking story about rebuilding…year after year after year.

    That way In the meantime we don’t need be reminded day after day after year of the disaster that was INIKI.

    Let it be a place to bring warmth to our hearts and Smiles to our varied faces when we pass by.

    Mahalo,

    Charlie ( I don’t know nothing else )


  5. RG DeSoto December 10, 2017 10:21 am Reply

    Bottom line is that the county has interfered with this project moving forward for decades, costing the various owners a fortune. If the bureaucrats and political hacks would’ve just gotten out of the way this project would have been completed many years ago. Nothing gets done when the decisions surrounding it are politically motivated vs. market driven.
    RG DeSoto


  6. kauaiisfun December 10, 2017 10:39 am Reply

    Make a county-wide park out of it. With ample parking.


  7. randy kansas December 10, 2017 11:05 am Reply

    the EPA and Federal Government should be notified;

    this place is an environmental hazard, for many reasons: rats, disease, pollution leaking into the soil, water and ocean for starters …. and the owners and the county should be fined by the Feds;

    where are those Surf-Rider folks that sue everyone ?

    enough is enough;

    tear it down for goodness sakes;


    1. Bob J December 12, 2017 2:44 am Reply

      The property has had rat control since it shut down…..monthly refills of bait stations…..not sure what disease you seem to be referencing unless it comes from people illegally trespassing on the property…and pollution from what leaking in to the soil ? there are no fuels, chemicals, etc on the property ? No idea where you get your info. In over 20 years I’ve only seen one live rat there….there are more than that living at most people’s homes.


  8. Debra Kekaualua December 10, 2017 12:09 pm Reply

    Rumors of Cartel, continued harrassment of lineal descendants via county KPD, Moguls in office currently and before iniki. There is no way the state’s burden to prove annexation, which means, check your title guarantee insurance corporates, no U.S. court has jurisdiction, “property title TMK” is a figment of all u.s. hawaiian voters imagination. Allodial means u.s. militaropolitical game plan died and everyone complicit with this Ruse will be held accountable. Kanaka Maoli Lahui is the new game and excludes corruption so vast on Kauai, people need to awaken to the smell of kauai coffee OR GMO field sprays that has caused severe malady in our children that is aggressively taken hold out of every 5 children 4 have heart repair, autism spectrum, etc and this is only in Kekaha. We are not going anywhere unless Mr Un, pushes his button, then with no bunker to go to for safety, we got fifteen minutes to watch our clocks, before our last Ha.


  9. Sunrise_blue December 10, 2017 12:15 pm Reply

    The elected officials, like county councilmen and mayor are failures. Delays. 2018


  10. kimo December 10, 2017 12:23 pm Reply

    Loooong past due for developer performance. County should be fining these people every month for weed abatement, lack of security, and anything else they can imagine.

    Zero tolerance for BS developers who have mislead or lied to the County and people of Kauai for years.


  11. kauaidog December 10, 2017 12:26 pm Reply

    Well, How bout they fix the hwy in front before development so that IF and when the place is rebuilt all the traffic access is complete? Make sense right? $125K annual salary please. Anyone noticed how bad the road has gotten?


  12. Sunrise_blue December 10, 2017 12:52 pm Reply

    Unless you want to give your mayor the full $500,000 dollars or so for being a sports figure. HTA, hawaii tourism authority. Hawaii Bowl 2017.


  13. Manawai December 10, 2017 12:56 pm Reply

    Funny how these County people, Yukimura in particular, are complaining about how long it’s taking to rebuild Coco Palms when the project is stuck in the County’s own building permit process. Lethargy and incompetency? No doubt. Grounds for a lawsuit due to County departmental collusion with the anti-development folks, like Yukimura? Probably.


  14. Sunrise_blue December 10, 2017 12:56 pm Reply

    I don’t get it. The elected officials are failures. Why go with their meetings?


  15. M. Lepard December 10, 2017 2:14 pm Reply

    I have had a love affair with Kauai and it makes me so sad that again something isn’t done to get the property up and running..if it isn’t turned into a hotel why not a senior community for those on fixed incomes. ..


  16. Pete Antonson December 10, 2017 3:06 pm Reply

    Anyone with reason and aloha will acknowledge that having bums and criminals camping on your property while be surrounded by hand wringers saying “Oh, there’s nothing we can dooooo!” will make investment capital a tad difficult. If you won’t make allowances for this, you’re nothing more than a disingenuous agenda pusher.

    Speaking of agendas, there is no money for a park! The State has no money for a park! The County has no money for a park! No private organization has money for a park and the last time people tried they failed so stupendously that they need an article like this that berates them. Those that think this property could be seized without giving millions and millions and millions of dollars to the owners haven’t been able to read this far anyway and will get a pass!

    Your “next alternative” is at least 10-15 years away! Therefore, you should support the current attempt right up to the day they utterly fail. They’re closer than anyone’s been in 25 years. At least don’t contribute to the failure! Oh, because it’s not……”perfect?” Neither are you!


  17. Blue dream December 10, 2017 4:38 pm Reply

    Greene and Waters certainly are adept at dodging very basic questions. It’s time to demolish that sucker and turn it into a park and lesson traffic along it’s perimeters.


  18. Melinda Lorenz December 10, 2017 5:22 pm Reply

    It was not a hurricane that took this building, iniki did very small damage,
    The buildings were neglected and the owner has blamed iniki but it was his own financial trouble that put the place in ruins


  19. Gardener December 10, 2017 10:19 pm Reply

    I like the elderly housing idea.


  20. MisterM December 29, 2017 9:50 pm Reply

    I don’t see how they plan to make the project economically viable. First floor is unlivable due to flood zone. To add additional floors will require significant modifications that will drive costs up dramatically, IF they could get permits to do so. By rights, the place should have been demolished decades ago. Then there is the traffic issue – couldn’t be in a worse location. Baffling how any investor would touch the project with a 10′ pole. Finally, Greene seems worse than a used car salesman.


  21. TERRY March 2, 2018 9:31 am Reply

    You all need to to quit arguing and just get on with the program or it will never get finished this is so sad?????


  22. Z April 29, 2018 8:57 pm Reply

    Just what they really need another upscale dive the place should have been turned down before the storm I could care less of elves n the other premadonnas that stayed there make the usable for the people a park a senior center a school and the worst make it a gas station


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