LIHU‘E — A year after the remains of the famed Coco Palms Hotel was purchased at auction for $22 million, a legal challenge has been filed contesting the developer’s permits.
The iconic hotel, known for its use in Elvis Pressley’s “Blue Hawai‘i,” is yet to have recovered from Hurricane ‘Iniki in 1992, which left it in a state of disrepair.
Several efforts to rehab the property have ended in failure. In the latest, permits were issued in 2015 to the Honolulu-based Coco Palms Hui, LLC, which, after failing to make significant progress on the site, began a foreclosure proceeding in 2019 which concluded earlier this year.
“We were fooled,” said Council Vice Chair Mason Chock, in testimony at Planning Commission Tuesday. “Many of the leaders at the time thought it would move forward.”
The reason for the failure, according to Parker Enloe, who represents one of the investors in the project, was a lack of “capitalization,” as developers failed to secure the necessary money to bring the project to fruition. The site was purchased as-is, at an auction in July 2021.
The project was revisited at Planning Commission Tuesday, which examined the status update submitted by developers. Planning commission members clarified that the permits themselves were not up for action.
Lawyer Teresa Tico, acting on behalf of several community organizations, announced that she had filed a petition asking the Planning Commission to find that, because of the lack of progress on the project, the permits issued in 2015 should no longer be valid.
“We have found no substantial progress on this project in the first two years since the issuance of the permits in 2015,” said Tico. “Those permits have lapsed.”
Tico was one of more than 120 voices criticizing the project, including more than a dozen live testifiers. Opponents cited the cultural significance of the site as an ancient burial ground, along with the environmental impact and the effect on traffic from a new hotel. Among those who testified were members of a group that has been living on the property since 2017.
Eleven people submitted testimony in favor of the project.
“It’s about the correct and rightful use of the land,” said Fern Anuenue Holland, an environmental activist and county council candidate, who also filmed most of the meeting. “These critical resources are priceless ancient cultural sites.”
A common request from the testifiers was that the land be used instead for a native Hawaiian cultural center.
Developers expressed interest in including a cultural aspect in the project alongside a hotel.
“A hotel and a cultural learning center can coexist,” said Ron Agor, an architect on the project. “We plan to have a cultural center in the back, and we intend to invite the Hawaiian community to sit at the table and advise us on the things that we can do to preserve enhance and teach our guests the history and culture.”
Enloe said he felt like the community wanted “something to happen,” and that he had considered ideas like workforce housing and a cultural center on the site.
“I think the easiest way for something to happen is to use it for what it’s currently zoned for,” he said, referring to its planned use as a hotel.
Holland advocated for a more community-oriented cultural center rather than one geared towards tourists.
For the time being, the project appears to be moving forward.
The status update showed that developers had completed 10 conditions out of 29, up from eight last year. The foreclosure was finally completed in May this year, with the title now held by RP21 Coco Palms LLC.
Enloe reported that they have been working with the new buyers, a Utah-based company that had purchased the property.
“I believe they’re on the Zoom,” said Enloe at the Planning Commission meeting. “They can chime in if they want.”
The buyers did not make themselves known on Zoom, and their identities are not listed on the OpenCorporates website.
Enloe reported that the group had 18 of 25 building permits approved and that they were within weeks of getting all their building permits.
The Planning Commission unanimously accepted the status report.
According to public tax records, $165,151 in taxes are due on the property in 2022.
