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Owners scrap plans for a revival to focus on East Coast projects
By Kristen Consillio / kconsillio@starbulletin.com

September 19, 2007

The owners of Kauai's historic Coco Palms Resort this week listed the property for sale, leaving the fate of its revival in the hands of the next buyer.

"Our company is extremely busy doing things on the East Coast," said Walter Petrie, a principal in Coco Palms Ventures, a joint venture between the Weiser Cos. Inc. of South Carolina and Maryland-based Petrie Ross Ventures LLC. "We've decided it's too far logistically for us to handle this."

He added, however, that the recent slowdown in the resort residential market, stemming from the national collapse of the subprime lending market, played a part in the decision to shelve the project.

The decision also follows the denial in July of a special management use permit to build a spa and fitness center, which developers had been counting on to raise the resort's profile.

The company has listed the 18.8-acre property with brokerage firm Jones, Lang LaSalle.

Petrie said the price is negotiable; the company paid $12.3 million for the resort in January 2006. The total project is 32 acres, some of which is land leased from the state that cannot be developed.

The company is marketing the Wailua resort, made famous by Elvis Presley's film "Blue Hawaii," to other hotel-condominium developers that are closer to the islands, he added.

The project has permits for 200 luxury condominiums, 104 hotel units, restaurants and retail shops, though developers had planned to build only 48 hotel rooms and bungalows. Developers are refunding deposits on the 25 condo units that were sold this year.

Demolition and building permits are all that are needed to begin construction. Coco Palms Ventures has spent millions of dollars over the past two years in planning and design work, building a sales office and securing state building approvals, he said.

"If the new developer endorses our plan we came up with he can basically hit the ground running and start construction within a couple of months," said Petrie, adding that the only glitch is whether or not the new buyer wants to continue with a larger spa or the smaller facility that was originally planned.

However, the new buyer also could choose to build a new development altogether, leaving behind the old resort that has sat in ruins since being destroyed by 1992's Hurricane Iniki.

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