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  From The Timeshare Beat, March 17, 2000:

Kauai's Coco Palms Hotel: First Among The First
By Andrea Hackman

HONOLULU, HI -- The very first "timeshare-as-we-know-it" opened for business on the island of Kaua'i in 1969, and the industry exploded outward from there to encompass the world.

In the near future, the very first resort hotel ever built on Kaua'i is aiming to join the ranks.

The well-loved 396-room Coco Palms Hotel has received its permits from the County Planning Commission that allow for conversion of the hotel to a 232-unit timeshare resort. The vote on the permits came only after the county Planning Department added a long list of conditions ensuring protection of native Hawaiian archaeological sites and burial grounds.

Still to go is the final due diligence and the closing of the sale. The property is being sold to Coco 1388, a LLC of which Newport Beach-based Lincoln Consulting Group is a managing member.

The Coco Palms, with its torchlit lagoons and distinct Polynesian ambiance, was once considered among the most beautiful hotels in Hawai'i. It is best known for its lagoons and thatched wedding chapel, where the wedding scene in the Elvis Presley movie "Blue Hawai'i" was filmed in 1961. The original owner of the resort- who purchased it as a ramshackle motel in the early 1950s-- was the first in the islands to create the torch-lighting ceremony, with native Hawaiian runners dashing through the grove lighting torches as a sign of Hawaiian hospitality. Many of the hotels of Hawai'i have since copied the practice, but none ever brought it off with quite the style of Coco Palms.

The Coco Palms Resort is nestled amidst 47 acres of a secluded coconut grove on the Eastern Shore of the Island of Kaua'i. Located across from a one-mile stretch of white sand beach where the sparkling Wailua River meets Wailua Bay, the resort is just 6 miles from Lihu'e, capital of the Island of Kauai, and 5 miles (10 minutes) from Lihu'e Airport.

The hotel was badly damaged during Hurricane Iniki in 1992 and has remained shuttered ever since. It was a classic Hawai'i resort, built among hundreds of coconut palms on an old plantation and overlooking lagoons where outrigger canoes were hauled up on the shore. Weddings at the famed chapel have continued to be held throughout the ensuing years-- even though the hotel was closed-- and the property has remained the most popular stop on the island's Movie Tour agenda.

The majority of the structures in the old resort will have to be demolished to make way for the new resort, but Lincoln Consulting intends to retain the traditional ambiance that the Coco Palms is famous for.

The new owners-to-be originally hoped to be able to preserve the hotel, but given the fact that today's travelers are highly discerning, the basic structures are functionally obsolete and dated, plus the fact that current flood-zone requirements-- coupled with the projected costs of upgrading the property to meet current county building, electrical and mechanical codes-- that became an impossibility.

The preliminary construction budget for the project exceeds $60 million.

Federal 100-year flood requirements mandate that ground-floor levels of structures must be 15 feet above sea level. The current level is far below that, averaging 0-3 feet through the areas where the new resort will be constructed. One of the interesting aspects of the redevelopment will be the filling of certain areas to bring the project to the required 15 foot level. The Coconut Grove is largely uneffected by this, as no guest units or resort operational buildings are located within it. The lagoons may be raised in portions or terraced to maintain the property's relational balance and ambiance with the guest accommodations.

Not all of the current structures will be demolished. According to Lincoln Consulting spokesman James Reed, the historic Wedding Chapel, donated by MGM studios to Coco Palms after their use of it in the movie Miss Sadie Thompson, (starring Rita Hayworth) will be retained.

"We will refurbish the King's Cottage which Elvis used in Blue Hawai'i and his subsequent trips to Coco Palms Resort," said Mr. Reed. This and the chapel "...will be maintained within the Coconut Grove for viewing. The chapel will continue to be used for weddings, as it has been for thousands of ceremonies in the past. In fact the current Mayor of Kaua'i was married at Coco Palms."

The company is also considering keeping the Coconut Palace and Queen's Audience Hall buildings and using them for the new resort's restaurant and dining facilities.

Said Reed, "These are two beautiful old buildings that may be recoverable - and they have the beautiful murals inside on the walls, as well as gorgeous koa wood doors, bar and other treatments."

They also intend to have a "Wailua/Coco Palms" Museum that would "pay respectful homage to the Wailua area, the people of Kaua'i and hopefully capture the essence of the important cultural, spiritual and historical aspects of the Wailua area and History of Coco Palms itself," according to Reed.

In addition, the new owners have vowed not to lose even one of the coconut palms, and will dig up those that may be necessary and replant them elsewhere on the property.

Comprising seven parcels of land, with a total of 47.52 acres, the site includes the Seashell Restaurant across the street. Four of the parcels are leased from the state-- including the coconut grove-- through the year 2048. The new owners intend to upgrade and modify the Seashell, which is in need of structural repairs and improvements. Resort guests will be able to cross the highway to the restaurant on a Polynesian-design footbridge.

Plans for the new resort call for the 232 timeshare units to occupy eight buildings that are 3- and 4-stories high, separated from Kuhio Highway by a vegetated buffer zone 30 to 60 feet deep. Plans are being made to include space in the new resort for a hula halau hale (a halau is a group, a team; hale means house), which will be open for halau to use free of charge for practice. Approval has already been given for hotel uses, including a spa and tennis courts, in resort, residential and open zones.

Additionally, there would be 20 luxury suites in 10 one-story thatched-roof, Polynesian-style duplexes, to be rented as hotel rooms. All will likely be on the lagoon.

The new entrance to the resort will be off Kuamo'o Road, beyond its intersection with Kuhio Hwy, with a drive curving through the palms. A new lobby, designed to look much like the original, would face the coconut trees instead of looking makai (toward the ocean).

Though the majority of people on the island seem to be in favor of the new resort proposal, a group of about 50 people-- mostly Native Hawaiians-- recently lodged an objection to it based on ancient burials on the property and the sacredness of the site, and asked the Office of Hawaiian Affairs to purchase the land for the Hawaiian people.

Said Mr. Reed, "Lincoln Consulting Group has at all times sought to work closely with the Native Hawaiian community on Kaua'i, as well as the other people within the community on Kaua'i in discussing redeveloping The Coco Palms Resort. We have on several occasions modified our plans to accommodate comments and concerns we have heard during our meetings with people and groups in the local community.

"We in fact met several months ago with Cheryl Lovell-Obatake and several Kapunas (elders, including Auntie Sarah Kailikea) regarding our proposed redevelopment. At that time Cheryl and Auntie Sarah indicated they were in favor of our plans, and felt we were dealing sensitively with the important spiritual, cultural and historic issues of this special place - The Coco Palms.

"I have told Cheryl on more than one occasion, both face to face and in e-mail communications that we would treat any burials with the proper respect and protocol for reinternment. Given the Hawaiian historical styles of burial, it is often the case that ocean situated property would have burials located under the surface - and thus in a major Hawaiian resort development like ours, the issue of unearthing burials and proper reinternment is part of what any developer seeks to address in a proper and sensitive manner."

Cheryl Lovell-Obatake is the head of the Kaua'i-Ni'ihau Burial Council.

The Planning Council outlined a series of conditions to be met regarding these issues, which the developers have accepted and intend to exceed on their own initiative where they deem it appropriate.

Lincoln Consulting has hired the Honolulu firm of Wimberly, Allison Tong & Goo to design the project. Reed said the company hopes to have the resort open by the end of 2001 or early 2002.

While most of the project will be used for timeshare, a portion of it will always operate as a hotel. Initially, all the units will be pooled for hotel use. And even after all or most are sold, those units not in use will be rented as hotel rooms.

Standard timeshare occupancy of a resort is generally at 80 to 85 percent. Using those figures and counting the luxury suites, there would be about 60 suites available for hotel guests nightly, after the project reaches sellout.

Information about the history of the Coco Palms, along with photographs, may be found at http://www.coco-palms.com

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