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Coco Palms up in the air
By Michael Levine - The Garden Island
Wednesday, February 11, 2009

LIHU'E - More than four years have passed since permits were first approved for a major overhaul of the derelict structure that was once the world-famous Coco Palms resort, but a lack of visible progress and frustration with the stewardship of the Wailua property has pushed the project to the verge of extinction.

At the county Planning Commission meeting Tuesday at the Moeikeha Building, Phil Ross, one of three owners of the historic property, argued the development should receive not just the two-year extension to its permits requested in a November letter but a three-year allowance due to current and future economic conditions.

"Considering the economic times that we're under today ... the available funds to move projects forward has all but dried up. Loans are not available today,h Ross said. "I believe it's going to get worse in 2009, so I'm going to ask you for a three-year extension to this SMA."

The commissionfs decision on the matter was deferred but the issue is expected to be addressed again before Coco Palms Ventures LLC's current permits expire on May 23, two years since the county last took action.

In January 2005, a variety of permits - a special management area use permit, a project development use permit, a use permit, a variance permit and a Class IV zoning permit - were approved. Plans called for the first phase of the work - demolition of at least 90 percent of the buildings - to commence shortly thereafter and for a $220 million resort including 48 bungalows and 200 condominiums to open in summer 2008.

In May 2007, the county approved an amendment to one of the project's conditions, starting the two-year clock.

With deadlines having come and gone, and a list of required community benefits (opening of the parking lot, maintenance of and public access to the coconut groves, designation of the fish pond as a historic site, infrastructure improvements at the junction of Kuhio Highway and Kuamo'o Road) still unfulfilled, commissioners and residents asked Ross why he deserved more time.

The developers were accommodating a public easement for a segment of a walking trail in the area, were willing to make the parking lot available to the public gwhenever you wish,h were hashing out the details of a deal with the Department of Transportation, were working on the fish pond designation and were proposing to have the Department of Land and Natural Resources void their lease on the coconut grove, transferring management back to the county, Ross said.

He testified that he was concerned about liability for falling coconuts and other injuries, but after being pressed by the commission on his responsibility to manage the grove as an essential component of the original permitting agreements, Ross said in a brief interview after the hearing that the resort would be happy to resume control when the resort becomes operational.

Kapa'a resident Thomas Contrades said that despite Rossf testimony to the contrary, gAs a member of the public, I have seen nothing happen on this property. It is an eyesore, itfs disgusting, terrible to go by. The grass is way too tall. The coconut grove looks like hell.h

"(The reason) why we approved this in 2005 (is that) you were going to bring back the Coco Palms hotel the way it was,h Commissioner Steven Weinstein said. gThe few years have passed and nothingfs happened. To give you an extension to see how the economy turns around, just to give you an extension at this pointh would not make much sense.

Rayne Regush, another area resident, said much time has passed since the commission first approved the permits, gand as Kauaei is rapidly changing, some of those rationales for past decision-making are no longer relevant or accurate.h

In addition to orally amending his extension request from two years to three, Ross also said the scope of the project would be dramatically changed. Rather than dismantling the existing buildings entirely, Ross proposed salvaging the concrete structures in an approach that he deemed less expensive than the original "grandiose" plans.

Furthermore, the resort he envisioned would feature 200 to 300 hotel rooms and no condominium units, although he said specifics could change if and when the developer brought a new investor on board and noted a meeting to review the feasibility of salvaging aspects of the Coco Palms was scheduled for later this week on O'ahu.

When Weinstein suggested that such substantial changes to the plans could necessitate a new round of public hearings and possibly a new permit application process, Ross said the time and money already spent on the project should not be ignored. He later quantified the investment to date in the range of $30 million.

"For those in the development industry, itfs important to have entitlements including permits and zoning classifications,h Ross said. gWithout the continuation of those entitlements , youfre taking away ... ammunition to encourage a joint venture partner to join me in the development of this property.h

"This SMA extension is very important, otherwise it might be there another 18 years in the current condition,h he said in reference to the amount of time the one-time home of Queen Deborah Kapule, Kauaeifs last reigning queen, and the site of the famous wedding scene in Elvis Presley's 1961 film "Blue Hawai'i" has sat essentially unaltered since it was severely damaged in 1992's Hurricane 'Iniki.

"It isn't what I want, it isn't what you want, it isn't what the residents want or what the visitors want,h Ross said. gNobody wants it. I despise it. I hate it.h

Resident Elaine Dunbar, who believes the request is a gfishing expeditionh and a gcon game,h said in prepared testimony, gThatfs exactly what the developer is asking the county to do is allow it to remain in its current condition for extended time - until 2012 or ad infinitum.h

Michael Levine, staff writer, can be reached at 245-3681 (ext. 252) or via e-mail at mlevine@kauaipubco.com

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