Developers of the Kukui‘ula residential project in Po‘ipu are not yet close to receiving subdivision approval from county officials. Yet, that is not standing in the way of prospective home buyers who are putting $50,000 into escrow accounts for the
Developers of the Kukui‘ula residential project in Po‘ipu are not yet close to receiving subdivision approval from county officials.
Yet, that is not standing in the way of prospective home buyers who are putting $50,000 into escrow accounts for the opportunity of being part of a lottery to be used to determine potential owners of future South Shore home sites.
The site is located between Koloa and the National Tropical Botanical Garden at Lawa‘i Kai.
“We have been accepting certificates of interest,” said Katherine Brocklehurst, director of marketing for Kukui‘Ula Development Company LLC.
Brocklehurst acknowledged developers cannot list properties for sale until they have received subdivision approval. She said the entire project could take up to 10 years to complete.
She said they were “far into the permitting process” with county officials, but had no definitive start-of-construction date.
Kukui‘Ula Development Company LLC was established by, and represents, Alexander & Baldwin, Inc. (A&B) and DMB Associates Inc. of Scottsdale, Ariz., whose leaders entered into a joint venture to create a master-planned community on a 1,010-acre site.
A&B officials contributed 846 acres of fully entitled land valued at $30 million to the project.
Brocklehurst said the $50,000 deposits were being put into interest-bearing, escrow accounts. The certificates of interest stipulate that the seller must contact the depositor by April 1, 2006.
Kukui‘Ula Development Company Chief Executive Officer Richard Holtzman said even in this most preliminary stage of the project, there was very strong interest in the 122 earliest properties coming available of what is proposed as the first sector of a 1,500-unit property development.
Future homes and lots in this earliest part of the project will range from $1 million to $4 million.
“We’re very impressed with how many people wanted to get in on the ground floor,” he said. Holtzman said if someone decided they did not wish to be part of the project, they could cancel at any time and receive their deposits back.
The earliest properties coming available for potential future sale call for 122 units.
Brocklehurst did no reveal how many escrow deposits had been collected.
Brocklehurst said she wanted to make it clear that anyone with an interest in the development is being told up front that everything about the project, including lot sizes, types of homes and prices, is subject to change.
As currently listed, home sites without cottages on a quarter acre of land range from $1 million to $2 million.
Mauka home sites on a half acre of land will go from $1 million to $3.95 million, while cottages on 1,500 to 3,000 square-feet will range from $1.5 million to $4 million.
Holtzman said that, as currently envisioned, the entire development will feature an 18-hole golf course, a small resort and commercial center, spa, and a public park. He said the development would not have direct beach access.
According to the most recent MLS (Multiple Listing Service) data, there are currently only six homes for sale on Kaua‘i listed for under $400,000.
One is in Kalaheo, three are in Kapa‘a, and two are in Wailua.
According to a U.S Equity Research report dated May 19 by J.P. Morgan Securities Inc. on A&B’s stock status, potential revenues based on the prices and interest from potential buyers in the development were cited in part as a basis for upgrading the stock based on cash-flow prospects over the next five years.
The report cited 300 non-binding reservations had been made in what was referred to as the “Founder’s program.”
“The Founders program has revealed $1 million to be the floor price, with some units selling for as much as $4 million. Consequently, we have raised unit-price estimates for this project by 100 percent to $2 million, although we believe that this new estimate may prove conservative as the remaining units are completed and sold over the next eight years,” according to the J.P. Morgan analysis.
Another analyst who did not wish to be identified for this story but whose name is known to The Garden Island said the J.P. Morgan report did not reflect what was happening. This analyst felt that the very-high prices, lack of beach access, and likely delays, coupled with a saturation of development in the Po‘ipu area, could deflate the high expectations of the project and the value of the stock, traded as ALEX on NASDAQ.
