Valenciano to rule on Coco Palms foreclosure case

LIHU‘E — A state Circuit Court judge on Tuesday allowed one of the would-be Honolulu redevelopers of the iconic Coco Palms Resort in Wailua to lodge a last-minute objection to a proposed agreement that would send the troubled hotel to the foreclosure auction block.

The move by Judge Randal Valenciano to let developer Chad Waters file objections to two competing proposed rulings left Coco Palms again twisting in the wind. Valenciano gave Porter DeVries, the lawyer representing Waters, until Monday to file his objections.

But Valenciano said he will rule next week on which of two competing foreclosure motions he will accept. Each version of the proposed ruling would send Coco Palms to the hands of a court-appointed commissioner who would set a date for the auction. That probably could not occur until 2021.

The foreclosure was originally filed last year. The Utah-based mortgage-servicing firm that controls the $22 million mortgage seeks to sell off the Coco Palms property to recover the value of a loan taken out by Waters and his partner, Tyler Greene. Coco Palms has sat essentially in ruins since Hurricane ‘Iniki in 1992.

The Tuesday hearing had been expected to involve debate among the various lawyers in the case over the details of a proposed summary-judgment order. But when Waters’ lawyer said he wanted to object, Valenciano said he had no alternative but to require that the objections be filed in writing. The entire hearing took less than five minutes.

All of the lawyers involved appeared by telephone from Honolulu, their disembodied voices echoing through the courtroom, where fewer than a dozen spectators —none of them directly involved in the Coco Palms case — sat.

But the foreclosure may, for the moment, be the least of Coco Palms’ problems. A newly surfaced report by the long-time project architect who had hoped to work with redevelopers concludes the remaining concrete frame structures that served as the hotel’s main buildings are so severely damaged by climate-induced rust and rotted concrete that they may have to be demolished. The situation is so dire that the columns could fail within four to six months no matter what happens in the foreclosure.

In a further complication consistent with the “Perils of Pauline” nature of attempts to rebuild and reopen Coco Palms, the architect, Ron Agor, said Tuesday that a mainland contractor and developer has reached a tentative agreement to buy the Coco Palms property. Agor said he was not free to identify the developer or disclose the prospective sale price. He said further details could be available in late June.

Agor said he is in the process of finalizing building plans for a reconstructed Coco Palms. However, Coco Palms Hui has been saying periodically for several years that a buyer who would pave the way for Coco Palms rising from its ashes, only to have such transactions fail each time.

Valenciano is trying to choose between two proposed summary-judgment orders that would bring an end to the foreclosure and spell out exactly how the hotel property would be disposed of. If a buyer has actually materialized, such a transaction could stop the foreclosure dead in its tracks.

But the immediate future of what remains of the original buildings of Coco Palms appears to be a far more risky situation.

Dozens of the reinforced concrete structural columns that hold the existing building frames up are badly deteriorated. In many, so much concrete has fallen away that severely rusted rebar shows through. In some of the columns, the rebar is so deteriorated that the steel fully protrudes from the concrete it was designed to stabilize.

In a statement released over the weekend, Agor said: “We have been evaluating these structures yearly for over five years.” Plans Agor is developing, he said, will “address the concerns and recommendations of the structural engineer.”

“This will include repairing of concrete columns and replacing them as required.”

He said the stabilization could also require construction of new concrete supporting walls and then wrapping all of the existing concrete structures in a polymer fiber material for added strength.

Agor said any final designs for Coco Palms will have to address specific desires of any new owner. He said his firm has had interactions with three or four such would-be developers in the last year. A buyer emerging at this point could require Agor’s plans to be completely redone, he said.

An experienced construction supervisor interviewed by The Garden Island said on Monday, however, that the condition of the concrete columns suggests that the structures in question may simply be unsalvageable. The construction supervisor also questioned why any developer would want to bother with trying to save the existing concrete as opposed to knocking it all down and starting anew.

Word of the impending court date drew widespread condemnation on social media on Kaua‘i over the weekend. Dozens of posters objected to the entire concept of redeveloping Coco Palms, insisting instead that the site should be taken over the by county or state and turned into a park or affordable housing.

Many people commenting on social media also urged that the entire site be transferred to the control of Native Hawaiians — a contention reminiscent of the lengthy occupation of part of the Coco Palms property two years ago by Hawaiian separatism activists.

“Sadly, I think its time HAS already run out. And with so many failed attempts to raise it from the ashes, its death knell is on the doorstep,” observed someone who identified herself as Debbie Schenker on Facebook. “Would like to see a large low-income housing complex built there with day care. Coco Palms was magical in its day, but Iniki decided that day was done.”

“Tear it down. At this point it’s been a historical eyesore longer than it was a hotel,” said a Facebook poster identified as Jamie Carney. “A couple of generations of children have only known it as a dilapidated old building. And do we really need another hotel right at the worst bottleneck of traffic on the island? Give it to Hawaiians. Make it a working cultural park and housing.”

  1. Anahola Paul June 10, 2020 5:01 am Reply

    Have you walked the property recently? I did. I went on a tour of the property with a local tourist company in January. The property is in terrible shape. I mean…terrible shape. After years of decay…the bones… of the property are collapsing. Engineering and construction methods from 70 years ago will not support any updates to the asset. SO…since you are going to be forced to tear it down anyway…re-purpose the property as a Kauai- Hawaiian Education Facility. That’s what this property and area needs to be. It is holy grounds that we need to share with visitors. The current land owners, by default of the mortgage, need to come with a better solution like a public-private investment partnership. If they want to build a hotel…I believe a 11.78 acre site called the Coconut Plantation Village is still available (down the street)… I would tell the developers to buy that land and build…but donate the CoCo Palms land and move on.

  2. Rev Dr Malama June 10, 2020 7:46 am Reply

    And the plot sickens…

    Is it going to take a tsunami, hurricane and another round of pandemonium to get this property cleared, cleaned and returned to the Hawai’ian region people who hold it SACRED?!

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