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Finance Foreign financing needed

Coco Palms developers look at immigrant investors for $125M project

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Posted: Tuesday, July 1, 2014 1:45 am

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.”

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  • Opae posted at 5:27 pm on Tue, Jul 1, 2014.

    Opae Posts: 2

    Here we go again.
    These people do not own the property that Coco Palm sits on.
    They are trying to get other people to put up money for this.
    If you think traffic is bad now try putting back the old crosswalk across Kuhio Hwy that was there before, so that the tourist that were staying at Coco Palms could walk to the beach.
    These people talk a good story, but think about it, they do not own this property right now.

  • lumahaimike posted at 4:52 pm on Tue, Jul 1, 2014.

    lumahaimike Posts: 19

    Like "commonsense" says there are many Red Flags. For those of you don't know or don't remember why CoCo Palms has not been rebuilt, check out www coco palms.com/articles

  • norm smith posted at 2:30 pm on Tue, Jul 1, 2014.

    norm smith Posts: 1

    We need stronger laws to allow United States Land that has been neglected due to insurance companies and outside investment.... to be taken back by local government and rebuilt with local contractors and local money...... Maybe then a park system would be created, for the people to enjoy.. instead of another hotel and more low paying service jobs...... Only with strong leaders will Kauai flourish , and not become another Waikiki.. owned by outside investors.

  • commonsense posted at 12:31 pm on Tue, Jul 1, 2014.

    commonsense Posts: 72

    I see a few more Red Flags! I honestly don't see how this project can be carried out without having a huge negative impact on all people travelling through this area, but especially the residents living and commuting daily through there.

    Where are the hundreds of workers and managers going to park? Where will the entrance be? Are the developers having to contribute funding for the obvious infrastructure improvements that will need to be done (driveways, side walks, road improvements, crosswalk improvements and/or overpass building)? Isn't the property in a flood plain? What about the Seashell Restaurant and its parking situation? Lots of questions with no clear answers.

    I just hope that if this project doesn't come to fruition, the powers that be will pull the plug on allowing this property to be redeveloped as a resort once and for all. Just my personal opinion.

  • Andy Parx posted at 11:40 am on Tue, Jul 1, 2014.

    Andy Parx Posts: 256

    So these slick talking hucksters don't have two plug nickels to rub together yet. Put you dreams and wishes in one hand and spit in another and see which one fills up first.

    And that dilapidated, tumble-down monstrosity is still sitting there despite last year's promise it would be gone in six months. Nothing but an illegal dust fence with another "after-the-fact" permit and no SMA permit for the fence or the hotel yet.

    I remember when it was "the Japanese" who had "too much money" and were going to invest in everything. Then it was "the Arabs." Now it's the Chinese (whose economy is also on the verge of collapse as happened to the Japanese and "Arabs."

    I'm sure everyone in Wailua Homesteads and Houselots just can't wait to add another 10 minutes to the time it takes to make a left onto the highway.

    What are we- a bunch of idiots? Don't bother to answer... I think you know.

  • Rightdirection posted at 11:20 am on Tue, Jul 1, 2014.

    Rightdirection Posts: 271

    Never going to happen. County should quit wasting time and take it over now!

  • BorninHawaii posted at 10:14 am on Tue, Jul 1, 2014.

    BorninHawaii Posts: 397

    Only JoAnne would be concerned with people who want to help and give us money. Take the money and run, run fast , run long, and run hard. You complain about the project not getting done then you throw up roadblocks, question motives, and act concerned fo the people of Kauai. Please, give us a break, Support it or get off of it. You have to stop this "Death by a thousand cuts" If you are going to stab it stab it in the heart, that's the humane thing to do. At least it and the citizens of Kauai will not suffer.

  • Makaleha Pigdog posted at 9:43 am on Tue, Jul 1, 2014.

    Makaleha Pigdog Posts: 27

    Only 2 years ago the bike path at Wailua Beach was redesigned to be removeable because of the probability of beach erosion. Now one end of a pedestrian crossover spanning 5 lanes of traffic is proposed to be built on the same environmentally and culturally sensitive place? The developers propose a shuttle bus over to the old sea shell restaurant. They can play old Elvis tunes while crawling through the gridlock.


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