Musings: Gambling on Coco Palms

As Councilman Tim Bynum sees it, the question is, “Are we going to give Coco Palms another chance or not?”

But it seems the more pertinent questions are, does it make sense in 2014 to re-build a 350-room, four-story hotel in the flood zone at the most congested intersection on Kauai — and have the public subsidize it, to boot? By which I mean allowing the developer to possibly skate on requirements to pungle up employee housing, road improvements, impact fees and other exactions that would be assessed of someone building a new resort.

And why does the Council believe this developer can be trusted when all the other shuckers and jivers who had lofty plans for the site never did nuttin', despite being given chance after chance after chance for the past 20 years?

I mean, aside from Bob Jasper's vote of confidence, which meant an awful lot to Bynum, and Councilman Ross Kagawa's “special feeling” that the newest starry-eyed developers — Chad Waters and Tyler Green of Coco Palms Hui LLC — “are the guys to make it happen.”

The developers and their lawyer — former county attorney Mike Belles — were before the County Council's planning committee yesterday supporting an amendment to keep the “Iniki ordinance” in effect for another two years. That way they can rebuild the iconic resort without having to comply with laws adopted since it was trashed by Hurricane Iniki in 1992.

It's unclear just what requirements the developers will be allowed to skirt. Belles said the main deviations would pertain to setback and height, and some construction standards, such as hurricane clips. In order to comply with federal flood laws, the ground floors of the buildings along Kuhio Highway would be used as parking structures, rather than hotel rooms, and some of the mauka buildings, including the chapel and “Elvis Presley's cottage,” would likely need to be elevated or moved.

Planning Director Mike Dahilig said the county won't know exactly what requirements the developer will have to meet until plans are submitted. But he said the project will have to secure a special management area permit, which requires a public hearing.

After the last developer failed to perform, despite repeated extensions, the state allocated funds to pursue acquisition of the land for public purposes. But when Mayor Bernard Carvalho moved to end the Iniki ordinance, Waters and Green suddenly stepped forward with a grand plan to bring the resort back to its former glory. Coco Palms can only be rebuilt if the ordinance is allowed to stand, Belles said. If they have to go through the regular approval process, it would result in a different type of project.

In response to questioning from Councilman Mason Chock, who had a private meeting with the developers, as did Councilman JoAnn Yukimura, Waters claimed “we have absolutely zero intention to sell the property.” But Waters added the caveat that “life has interesting twists and turns and you never know exactly what the future will hold.”

Green said he views rebuilding the hotel as “my chance on a personal level to feel connected, to feel like I belong.”

Belles, by way of offering further assurance that the developers aren't fly-by-night, said they have two other properties, the Kauai Kalani and the Mokihana, and Waters' mother lives here, too. 

Waters said they've spent $500,000 to date on the project, supposedly with no guarantee they'd be allowed to proceed. "That's our commitment."

Though Belles said he can't guarantee the resort will be restored, even if the ordinance is allowed to stand for another two years, “we will make our best-faith efforts to rebuild.”

However, as soon as the developers apply for permits, they're vested into the exemptions of the Iniki ordinance, Dahilig said, even if they fail to begin construction before the ordinance is repealed.

And with permits in hand, the project could be flipped. Because as Waters said, you never know what the future might hold. You know, like the need for some fast cash.

The developers said the resort will employ about 400 people. It's expected to cost between $2 million and $3.5 million to demolish the moldering eyesore that the county has allowed to blight Wailua for the past two decades, with new construction taking about two years.

In response to questioning from Councilman Gary Hooser, who isn't a member of the committee, Waters said they have no intention of building timeshares. Hooser said he plans to introduce an amendment prohibiting timeshares, as they require fewer workers than a resort.

Jasper, who made it clear he is the only one authorized by owner Prudential Insurance to give tours of Coco Palms, said that hundreds of people have signed online petitions to rebuild the resort, “including some notable Hollywood names. People all over the world want to see this.”

However, none of them would have to regularly navigate the traffic generated by hundreds of hotel guests and workers on Kapaa's already clogged roads.

In the end, the committee agreed to let the ordinance stand for another two years. It will go to the full Council for a vote next week, where it appears likely to pass.

“Small risks lead to success,” Chock said.

“We could really use these good jobs for our kids,” Kagawa said.

Yukimura, while noting the project would preclude the community from moving forward with its vision for the site, said, “it may be we can merge the visions.” Belles said there's about four acres mauka that could possibly be used community and/or cultural purposes.

“My gut's telling me these individuals are sincere and committed,” Bynum said. “My intellect tells me that may change.”

My intellect tells me it's absolutely insane to add a 350-room hotel to that congested corridor. And my gut's telling me there's a sucker born every minute, with four of 'em sitting on the planning committee. 

But maybe, just maybe, they'll finally tear that wreck down. Though I wouldn't bet on it.