Coco Palms Resort to be rebuilt

KAPA‘A – The latest developer of Kaua‘i’s infamous Coco Palms Resort is officially prepping for the site’s demolition and reconstruction, and he says people can expect the new resort to be completed in about three years.

The announcement from Reef Capital Partners, a Utah-based real estate investment firm, comes just months after residents protested against the resort’s construction and years after previous developers failed to see any of their efforts materialize.

Demolition and clearing of existing structures is expected to start around April 15 and will take about three to four months to complete, said Reef Capital Partner’s Managing Director Patrick Manning in an interview with The Garden Island earlier this week.

He estimated that reconstruction would begin by Sept. 1, and that the new resort would be completed in about three years.

“It could be a little faster, and of course, it could take a little longer just depending on weather and other things that are out of our control,” he said.

The redevelopment of the 350-room resort is expected to cost roughly $160 million, according to Manning, with funding coming from a combination of internal capital and bank loans.

Several other developers have made failed attempts at rebuilding the hotel since its destruction by Hurricane Iniki back in 1992, but Reef Capital has been involved since 2015.

Initially, Reef Capital Partners was a lender to previous developer Coco Palms Hui LLC, but it took over the property in 2019 after the LLC defaulted on more than $11 million in financing on a $22 million mortgage.

Manning said Reef Capital was initially planning on selling the resort, but those plans changed when he started working on its development a couple of months ago.

“I did a lot of research and learned about the rich history of Coco Palms and how important that site is,” said Manning. “And so all my partners agreed, and we decided to keep it,” he said.

Manning’s hope is to restore the site to its former glory, and he maintains it will be operated in a “way that pays respect to its rich history.”

“My goal for the project is to build it back and honor the past,” he said, noting the land’s history as a royal residence, and later, its celebrity era.

In the 19th century, the resort was home to Kaua‘i’s last queen, Deborah Kapule Kekaiha‘akulou. When it was later established as a resort in 1953, several celebrities, including Elvis Presley, Frank Sinatra, and Rita Hayworth were known to frequent the hotel.

The resort’s popularity as a tourist destination and wedding venue spiked after it was famously featured in a wedding scene in Presley’s 1961 movie Blue Hawaii.

Manning said “thousands and thousands of people who had weddings, got married there, can come back and enjoy it,” adding he hopes the new development will “bring back the memories of back then.”

Planning Director Ka‘aina Hull, of the County of Kauai’s Planning Commission, confirmed Reef Capital has permission to demolish and rebuild all remaining structures at the now-derelict Coco Palms. But he added “whether or not construction will actually commence will remain to be seen.”

“They do have a condition of approval that once that last building permit is pulled, they have one year to commence construction. So that is a deadline now we are keenly watching.”

Plans to rebuild Coco Palms as a resort has been the subject of contentious debate for years between residents, developers and the county.

A 2022 change.org petition to stop its development has nearly 15,000 signatures, and states “there is a wide and passionate opposition to the establishment of another hotel in this location.”

In January, the Planning Commission unanimously denied a petition by community groups asking for a declaratory ruling that Reef Capital’s land use permits were no longer valid due to lack of substantial progress.

Hull told The Garden Island the commission decided against the ruling because they determined Coco Palms had met the necessary criteria to keep the permits in effect.

“From everything I can read … these are still valid permits,” he said.

Hull noted that he was not planning director when the permits were first issued back in 2015, but he would not second-guess the previous director and commission’s decision to approve the project.

“They looked at what they had, they look at the public testimony. And ultimately, (the permits) were approved,” he said.

Even though Hull and the rest of the Planning Commission determined they don’t have the authority to deny the permits, he understood why many residents were against the project.

“I don’t think myself or the County of Kaua‘i as a whole is really looking to facilitate, and prop up, and compel, and motivate more transient tourist resort types of accommodations,” he said.

Hull noted that any major resort development in Hawai‘i is going to be faced with scrutiny because of tourism’s impact on Native Hawaiians and other issues of cultural identity.

“But we have to respect the private property rights that a resort designated site that has active permits to build a resort still enjoy.”

Kauai resident Jason Blake said the Planning Commission was “failing residents” by allowing the project to continue. He told The Garden Island that the resort’s location, which fronts a major road right across the street from Wailua Beach, would cause heavy traffic and huge problems throughout the island.

“What happens when we dump a mega resort with hundreds of hotel rooms, a thousand more tourists, and hundreds of cars right there, at one of the most critical traffic points on the island?” he said.

Blake also emphasized the eroding shoreline at Wailua Beach, which has retreated significantly over the years.

“If you were here a decade ago, that beach went out for hundreds of feet. It’s now not a beach anymore,” he said.

“And who’s gonna staff the resort,” he added, pointing to major staffing issues on the island.

“This isn’t like an issue that’s really gray, and it depends on your viewpoint and everything. It’s black and white for most people. Like this is a bad, terrible idea. And so why is it moving forward?”

But Manning said Reef Capital Partners has considered these concerns, and that possible solutions may include a free shuttle back and forth to the airport, carpooling, having quality restaurants on-site, and other measures to prevent residents from crossing the highway and increasing traffic.

“We’ll certainly do the best we can to mitigate any problems that we create,” he said.

“I think the Coco Palms deserves to be rebuilt. Its history needs to be kept and not forgotten, and then we just try to do it as responsibly as we can.”

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Emma Grunwald, reporter, can be reached at 808-652-0638 or egrunwald@thegardenisland.com.