LIHUE — Officials seeking to rebuild Coco Palms Resort say they will likely rely on an infusion of loans from foreign investors to support the project during the hotel’s first years in operation.
If it is approved by the federal government, Coco Palms Hui, LLC Principal Tyler Greene said he and other officials will try to take advantage of a immigrant investor program, called EB-5 and administered through the U.S. Citizenship and Immigration Services, which provides green cards to foreign nationals who invest in new commercial enterprises and stimulate economic growth.
“We initially reached out to local banks here, but typically, local banks here don’t want to fund a construction loan that is over $30 to $40 million,” Greene said.
It’s a development that worries some county officials.
“I guess I’m concerned about having people who don’t have a stake in the community, and I just don’t know how long the commitment will be and what kind of commitment it will be to the community,” Councilwoman JoAnn Yukimura said.
Greene said it will cost about $125 million to rebuild the Coco Palms Resort, which includes purchasing the land from the hotel’s owner, Prudential Insurance, and installing a $5 million to $12 million photovoltaic system to power the resort.
If no lender is willing to provide Coco Palms Hui, LLC with a permanent loan, Greene said company officials will have to either raise more equity or re-negotiate lending terms with their foreign investors.
“We believe in this project and we’re confident that there will be permanent financing not only based upon Coco Palms and what it was but what we believe it will be,” he said.
Hyatt officials, meanwhile, have committed to contribute money for the Coco Palms property and provide Coco Palms Hui, LLC officials with the flexibility needed to manage the hotel property, Greene said.
Under an agreement reached by Coco Palms Hui and Hyatt Hotels and Resorts officials, the property would be called “Coco Palms by Hyatt,” Greene said.
Coco Palms Hui, LLC attorney Michael Belles said Hyatt officials are reviewing engineering and design plans for the hotel and may recommend minor changes to the current building plan.
Building permits for the hotel are scheduled to be filed by the last quarter of this year, Belles said, once the revisions are reviewed by the county Planning Department and Office of the County Attorney.
“There’s just a couple of things that we need to work through in terms of how the resort will flow and how the rooms will connect to the lobbies and common areas,” Greene said.
Some council members are concerned by one key part of the development: providing public access to hotel visitors across Kuhio Highway.
“The more I think about it, I don’t know how you could have a successful hotel without an overpass or some sort of crossing without crossing at the highway level,” Yukimura said. “I know it’s a big expense, but to me, it’s sort of an essential need. I don’t know how the plans will unfold on that, but it just seems like it will be a really critical part for your guests to access the beach, which they will want to do, and for members of the public who want to cross what will become a four-lane highway.”
Councilman Gary Hooser agreed.
“Having a successful hotel is one thing, but having a safe hotel that is safe for the community is of paramount importance,” Hooser said.
Councilman Ross Kagawa said improving crosswalks on Kuhio Highway alone could provide sufficient public access to Wailua Beach and the Seashell Restaurant, if it’s planned properly.
“I want to make sure the council keeps its focus as well and does not require things that may hamper the development from going forward like demanding that an overpass be built,” Kagawa said. “An overpass would be nice, however, I think it would possibly put out of the question whether Coco Palms can be rebuilt.”