LIHU‘E — The current owners of Coco Palms said Tuesday that they are willing to entertain offers to purchase the site of the dilapidated hotel.
The former hotel — which has been stuck in development purgatory since it was severely damaged in Hurricane ‘Iniki more than 30 years ago — has become a flashpoint for many residents who want the site to become a community-oriented project rather than the large hotel that owners are planning.
More than 150 community members submitted testimony to the Planning Commission, overwhelmingly opposed to a new hotel on the site — citing cultural significance, environmental impact, traffic and over-tourism.
Lawyers representing the ownership group appeared before the commission via Zoom on Tuesday, where they were grilled by commissioners on their plans for the project.
“Why would a developer want to move forward on a project that is fraught with such community
opposition?” asked Planning Commission Chair Helen Cox.
“I represent investors and I have a fiduciary responsibility to help them obtain their money,” said Chad DeCoursey, in-house counsel for Reef Capital Partners, one of the groups involved in the ownership of the property. “If there are community groups that want to pay to purchase the property, we’d be happy to entertain offers.”
The group most likely to step up to the plate to make an offer is I Ola Wailuanui, which has made efforts in the past to raise capital in order to purchase the land. Wailuanui, whose membership includes County Council Vice Chair Mason Chock, intends to create a community-oriented Hawaiian cultural and education center and agricultural park.
Fern Anuenue Holland, an activist involved in the group, expressed optimism about putting together a bid on the property.
“We would like the opportunity to present our PowerPoint to them,” said Holland, a candidate for County Council. “We think they’ll be impressed. We’d like to talk with them about a possible buyout.”
The site would not be cheap. It was last purchased in 2021 at auction for $22 million.
Holland said the funding to purchase the site could come through a “combination of government organizations, nonprofits, trusts and large donors.”
The Planning Commission discussion revolved around a legal challenge filed by attorney Teresa Tico, a member of I Ola Wailuanui, who argued the permits issued for the development in 2015 should no longer be valid because of the lack of substantial progress on the project. Attorneys for the ownership group argued there had been progress on the site, in the form of removal of asbestos and other actions, which they said cost more than $6 million.
The petition was deferred Tuesday, at the request of both the developers and Tico, until no later than Jan. 2023.
Who is the owner?
Commissioners expressed confusion Tuesday about who exactly owns the Coco Palms property.
The title is currently held by the recently created RP21 Coco Palms LLC, but representatives have been reticent to publically share information about what individuals are involved in this group.
DeCoursey reported the current ownership is made up of a group of lenders who funded a failed 2017 effort to develop the property, but would not disclose the names of those lenders.
That loan eventually went into foreclosure, when the borrowing group struggled to raise capital. Utah-based Reef Captial Partners managed foreclosure, which was completed in May.
The site is now under escrow, in the process of being transferred to new buyers. After the sale goes through Reef Capital Partners will maintain a small investment in the property.
Parker Enloe, who manages the assets of a large undisclosed investor in the project, listed two of the individuals involved in the purchase as Victor Kimball and Mitch Burton.
Kimball runs the Kimball Investment Company, which has developed both boutique independent hotels and motel chains, while Burton runs Mortar and Beam Construction, which specializes in luxury home construction projects.
Like the previous owners, Burton and Kimball are based in Utah.
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Guthrie Scrimgeour, reporter, can be reached at 808-647-0329 or gscrimgeour@thegardenisland.com.
