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Tiki Central / Locating Tiki / Coco Palms Resort Hotel, Kauai, HI (Hotel)

Post #809004 by bamalamalu on Thu, May 11, 2023 2:17 PM

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Kauai City Council talking about imminent domain. Current owners say they'd be willing to sell the property to the county for $22 Million.


(story from The Garden Island newspaper)

Kaua‘i County Council discusses buying Coco Palms BY THE CITIZEN ON MAY 11, 2023

LIHU‘E — After 30 years of failed attempts at private development and little progress made in improving the condition of the dilapidated Coco Palms Resort, the Kaua‘i County Council is considering taking matters into its own hands.

At a Wednesday briefing, the county council discussed the possibility of acquiring the property — either through outright purchase or condemnation and eminent domain.

Council Chair Mel Rapozo voiced support for initiating eminent domain proceedings, citing a history of trust issues and broken promises from a line of developers who have been involved in trying to resurrect the hotel after it was wiped out by Hurricane ‘Iniki in 1992.

Multiple attempts at redevelopment have ended in failure, with the most recent effort fizzling out in a 2019 foreclosure.

“I am not going to sit here and watch lie after lie after lie, promise after promise after promise,” said Rapozo. “I want the owners to know, I hope I can get the council’s support to move forward. We’re not playing around this time.”

The suggestion was met with an impromptu round of applause from those in attendance, many of whom came to testify against a hotel development on the site.

Rapozo suggested tapping county reserves or seeking state funds to acquire the property, which would likely carry a hefty price tag.

“I believe if this is what the community wants, we can get it done,” he said.

Eminent domain — the process by which the government takes over private property for public use while compensating owners — was initiated by the county in 2021 when the council approved a resolution to acquire a parcel of land in Kilauea for affordable housing. That condemnation proceeding is still working its way through the courts.

The Coco Palms developers, led by Utah-based RP21 Coco Palms LLC, expressed their willingness to sell the property at the Wednesday meeting.

“My client wants me to communicate to you today that if you want to purchase the property, you need not bother with condemnation or eminent domain. They will agree to sell the property to you for $22 million,” said attorney Mauna Kea Trask, who was recently retained to represent the developers.

Trask reported the money that had been lent to the project was from a pension fund for firemen, police officers and other government employees.

“The reason why we’re pursuing development on this project is because we need to make this money back,” said Trask.

The group has sent mixed signals about intentions for the property over the past year, alternating between expressing enthusiasm for going forward with a 350-room hotel project and expressing interest in selling.

Alleged land use violations

State Board of Land and Natural Resources Chair Dawn Chang updated the council on alleged violations on state-owned parcels of land adjacent to the Coco Palms property, which were the subject of a notice sent to developers last month.

The Coco Palms property is made up of parcels of land owned by the LLC, which include most of the major structures, and surrounding parcels leased from the state.

Chang cited several alleged issues with the developers’ conduct on the state lands, including that they have failed to maintain the premises, failed to submit annual reports, failed to pay property taxes, and cut down palm trees without consent.

The state Department of Land and Natural Resources is conducting an investigation into the developers’ actions, after which they will have the discretion to revoke the leases.

If those leases are terminated, the valuation of the property would likely be significantly reduced.

Trask said developers did not think they had committed any violations, and they planned to work with DLNR to address the issues.

“We definitely want to work with the community. We don’t want to fight the community,” he said.

Legal issues with the state leases have also become the subject of a lawsuit filed by community group I Ola Wailuanui, which is set for a hearing next month. The community group has expressed interest in acquiring the property for use as a cultural center.

As of late Wednesday afternoon, the council was still taking public testimony about the development.

A resolution urging DLNR to “act within its power to prioritize public access, uses, and purposes when considering requests for leases, licenses, permits, or other agreements” in the area near Coco Palms, was slated for discussion later in the meeting.