Latest on the pained Kauai Coco Palms Hotel, Kauai’s first and arguably most iconic resort ever. The place where the rich and famous once stayed and where Elvis Presley’s Blue Hawaii was filmed.
The developers have just defaulted on an $11M loan and the property is now facing imminent foreclosure. Doubt about the project’s viability had been widely discussed well before this kibosh. We drove by again this month and were amazed that other than the construction fences no longer obscuring the remains, nothing else had seemed to change in years. All that has happened is that the project completely disintegrated when developers were unable to acquire additional funding required. All to the chagrin of visitors, locals and the Kauai government.
Previously, the Kauai resort had been scheduled to reopen in 2020 as a Hyatt managed property with 273 rooms, 77 suites, 3 restaurants, a cultural center, 12k square feet of retail and more. It was set to be part of Hyatt’s Unbound Collection, a group of upscale luxury properties. Living here, someone we just didn’t believe this would really come to fruition.
Coco Palms Kauai | Resort Project Returns to Dead Standstill
When you drive by, you’ll see a great deal of the original concrete and steel, as in image below. The developers, now in default, planned to use these pre-existing steel and concrete structures as the base of the new resort. The iconic lagoon was also set to be restored as is shown in image above.
Past 24 months. Very little that’s obvious has taken place in the last two years at Coco Palms Resort. It had been looking more every day like a project destined for nowhere.
There is always talk about an alternative plan for Coco Palms, such as a county park. This is something that has been suggested for years. How that would happen, however, and where funds would come from to undertake such a process, is totally unclear. Kauai’s new mayor has supported such a concept, at least in theory.
Until something more happens, Coco Palms sits largely unchanged, destroyed through hurricane, fraud, neglect and to this day, ongoing controversy, for over a quarter century.
More big problems at Coco Palms.
1. Following demolition, construction was to have begun in spring 2017, but never occurred. Dozens of building permits are as far as we know still pending. We kept waiting to see something, anything happen, but still there was no development.
2. Then in 2017 a land dispute arose when a group of Native Hawaiians claiming to be descendants of Kauai’s King Kaumualii began living on the property. A judge refused to remove them from Coco Palms as more information was needed to determine the rightful owners. The developers have taken the position that “the county recognizes us as the owner of the property, and so we see it as criminal trespassing.” That position was affirmed by the court in 2018, when a summary judgment hearing ended the dispute.
3. Ongoing flood zone concerns. We’ve heard that county engineering is saying that the resort, if rebuilt, would need to comply with current flood abatement standards. Those did not exist at the time of the original resort. That could result in significant unanticipated costs and delays in order to flood-proof large areas of Coco Palms. We aren’t aware of any update on this issue.
4. Is there a current market for Coco Palms Resort? If the resort is ever rebuilt, how it can position itself in relation to other nearby Kauai hotels isn’t clear. Coco Palms is directly located on a very noisy stretch of Kuhio Highway, with no beach access. The idea of a pedestrian bridge has be thrown around, but we aren’t aware of any specific plans. In addition, competitive hotels have been built in recent years that, while not Coco Palms, offer beachfront locations at prices that could well undermine the potential for profitability.
Image courtesy of cocopalmskauai.com.