LIHU‘E — What remains of the Coco Palms Resort and the land its built was auctioned off in one bid for $22.231 million Monday to Private Capital Group.
Scott Ira Batterman, a Honolulu-based lawyer represented the Utah-based short-term, loan-servicing company, facilitating the bid for the site, which was sold at public auction at a foreclosure sale in “as-is” condition, without any warranty, with 10% of the highest bid payable. The purchaser is responsible for all costs and expenses for the closing, including eviction.
No other developers or interested buyers announced their presence or made a bid.
The auction was prompted by the June 2019 foreclosure proceeding of Honolulu-based Coco Palms Hui, LLC, which formed and initiated the latest attempts to revitalize the property in 2015. In March 2019, Stillwater Equity Partners, a parent company of Private Capital, took over the property after the hui defaulted on more than $11 million in financing on a $22-million mortgage.
Over 30 people stood watch Monday afternoon on the steps of the Fifth Circuit Courthouse in Lihu‘e, some with signs calling for development and desecration of the land to stop.
Following the auction, murmurs amongst the crowd wondered aloud if it was over. Then stepped up Kimberly Souza, who had lived at the Wailua property prior, offering a stone to Commissioner Craig DeCosta, who preceded over the auction. Souza expressed distrust in the court system.
“The property can’t be sold,” Souza said. “There’s iwi kupuna in there.”
Souza and others were previously evicted from the land in the past.
“Money cannot buy this thing,” Souza said. “I give you peace, sir, we offer you guys peace. Now do not, do not, look for a priest to help you.”
Famed for its celebrity clientele since its opening in 1953, Coco Palms never recovered after its destruction by Hurricane ‘Iniki in 1992. Several attempts to restore the iconic property since then failed.
After the announcement of the auction, community group I Ola Wailuanui came forward voicing the need to preserve the land and envisioned the creation of a Hawaiian cultural and education center, agricultural park and community resource.
“Our highest hope, that someone would step forward to bid for and secure the property out of developers hands and with this shared vision of returning the land to the community, did not happen,” Fern Anuenue Holland of I Ola Wailuanui said. “However, our primary concern going into today, that a developer that did want to push a hotel forward would bid and secure the property for the goal of further development and commercialization, also did not happen.”
Holland categorized the sale as a change in title from the foreclosing developers to the financial group to recoup the money from the failed investment.
“An individual, organization, foundation or trust could still step in and buy the property from the existing holders over the next 60 days for 5% more than the winning/starting bid today,” Holland said. “It’s not over till it’s over and it ain’t even close to over.”
Following yesterday’s actions, the commissioner will file a motion to confirm the sale. Coco Palms Hui did file an appeal on the foreclosure order, which could be reversed.
This marks just another chapter in the Coco Palms saga. The most recent plans were to take the remaining structure of the property and build a 350-room resort and rebuild cottages on the property, reminiscent of the preferred suites of famed celebrities who formerly walked its grounds.
“Coco Palms has been in a deteriorating state since I was a sophomore in high school,” Mayor Derek Kawakami said in a statement Monday. “This holds such a special place in the heart of our Kaua‘i community and is long overdue for action to be taken. There is a growing sentiment from our residents that the site not be returned to a resort, but instead become a community gathering place, such as a park with agricultural and cultural elements.”
While the county did not play a role in public auction, Kawakami expressed eagerness “to see who will purchase the private land.”
“We will work with the new owners to ensure that whatever becomes of the property, we honor the sacred nature of this site and the wishes of our community,” Kawakami said.