Thursday, December 12, 2013

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.


Anonymous said...

Nice article Joan! And you taught me a new word "pungle". Never heard it before, but like it.

Anonymous said...

There should be a performance bond of $500K to sit in a trust account. If the developers perform they get it back. 500K is nothing for a project of this size.
Grandfathering the permits will mean less parking than current requirements and many other issues. The Sea Shell restaurant will also be grandfathered with no parking and no convenient access.
I worked with Coco Palms and Mrs. Guslander back in the 70s and yes, Coco Palms is a romantic memory, but it can never regain its legend.
Traffic at the entry is another problem.
These guys are flippers, hold, get permits and flip.
Our council looked like pathetic little puppies being manipulated by a couple of slick guys pushing a long lost dream. For the council to act on a "gut feeling" shows that our council are a group of dreamy fantasists with no idea on how development works. Flim flam, thank you Ma'am. For almost 25 years Kauai has lived with the carcass of Coco Palms and now the Council Committee wants to allow it to linger for many more years. Hard money or go home. Check Chad Waters -Calif- for another picture of these "developers"....they are Realtors. Speculate with County blessings.

Anonymous said...

Maryanne Kusaka is the realtor. Former DLNR commissioner Ron Agor is Architect.

Anonymous said...

Thank you, Joan. I believe this new proposal has been fishy from the start. How were they allowed to start any kind of work there without permits?
Is that $500,000 going to be used as a chokehold on us now especially with that crook Belles involved?

There was a promise made to the residents here and that was it would be a community endeavor for a cultural site.

Anonymous said...

Re: Chad Waters

So is this the same guy? If so, so much for "due diligence" from our council, or from their touchy-feely "guts!"

Gosh, and all this from one simple google--m'gosh, you really got to wonder about this council . . .

Will this again be a 6-1 vote?

"A Santa Clara County Superior Court judge agreed Feb. 2 to remove the top leadership of San Jose's Waters Fund Management and to appoint a receiver to operate the firm following a request from several high-profile investors alarmed by the loss of better than half the equity capital initially raised by firm founder Chad Waters.

Waters, a real estate agent in Santa Cruz, relinquished management of Waters Fund a little over a year ago. But current management has said in sworn court filings that the losses the company has suffered are directly related to his questionable management. Neither Waters nor current management returned calls or e-mail seeking comment. Waters is not named as a defendant in the suit.

"According to court records, beginning in December 2004, Chad Waters raised in excess of $25 million for two real-estate investment funds with the goal of buying sites, enhancing their value and then selling for a profit. Toward that end, he used the funds to buy nearly two dozen California properties and attain options on various others."

And if you think this quote is taken out of context, here is this whole article:

Read it and weepy.

Anonymous said...

Joan got good "guts."

History indicates that Chad Waters indeed does intend to flip the Coco Palms property. His house of cards is falling,and he has more motive than ever to flip it:

Anonymous said...

Coco Palms should be treated like any other development and pay its dues. The "magic" will never be there again, times have changed and so the people too.

Anonymous said...

True leadership "gut feelings".
For Tim to speak of "gut" feeling, in his case, is a flabby, corpulent and bloated truth.

AAA said...

This is a joke. How many more times are we going to go through this? Geez.

Anonymous said...

The legend of Coco Palms should be allowed to be just that, a legend. Time to tear down the eyesore, and convert it into something the preserves the natural environment. Cleary without major road changes this will only create further congestion, frustrating visitors and locals a like.
Seems a bit odd that a demolition fence goes up so quickly before any plan is submitted. The council should really ask themselves if this plan really makes sense long term. I get that we need jobs on the island, but this one smells a little funny.

Anonymous said...

Chad Waters? I googled moku'aina properties llc there last venture and noticed the website was taken down. Its amazing the county can trust these guys, especially when a simple google search shows nothing good.

Anonymous said...

i wonder if the planning dept can make the permits/exemptions non-transferrable ? aloha Dean

Anonymous said...

I think we need TV talk host
Phil Donahue to lead the next council meeting for a "share your guts with the guys" session...followed by facilitation by Oprah... for the galz sharing about their "feelings".

We can have an onsite circle hand holding wishing event led by Marianne Kusaka and Ron Agor...with the Mayor BC in charge of food and entertainment.

Later.....Garrison Keillor will write a poem about it, and Arlo Guthrie a song.

BYO sledge hammer and steel toed boots

Zero Seven

Anonymous said...

but wait....why is this such a problem-this property is in the Visitor designated zone-was a popular hotel before and traffic didn't seem to matter then
or is it just because this is more visitors to take away from your sense of ownership of this island since you "recently moved here" ??

Anonymous said...

and don't forget it is a sacred burial ground

Anonymous said...

The people who made Coco Palms what it was are long gone- and with them the heart and soul of its hospitality and genuine concern for the workforce and community. The carcass is not an icon; it's an eyesore. There's a a brave new world out there populated by transplants, shysters, Ponzi artists and scheming promoters of all types who will give you 'aina, aloha, kokua, mana'o, up the wazoo and a good boot to the okole maka'ainana as they lighten your wallet. Elvis himself would be all for this project. Yes indeedy, The King would go.

Anonymous said...

2:52. There's a lot more traffic now than '92

Anonymous said...

Terrific mythology at work here regarding CP.
Left out of the demonization of the "developers who had their chance" was how the Spa, to be built on the already developed area of tennis courts, was shot down by activists and doomed their project.
Left out of the demonization of Chad Waters is that every realtor in America faced bankruptcy, beginning in 2007, just like he did.
Left out of the "300 car" traffic concern is how motorists at resorts do not all leave at the same time. Drive or stop along Poipu Road. The only time more than one car is in a resort driveway is during the late afternoon workers shift change.
Only one constructive thing has occurred since 2006 regarding turning Coco Palms into a park. Hawaii Islands Land Trust had a $270k grant application approved to pay for gathering "community input" and to study if "the idea is feasible." The money was never released.
Based on that, how many decades will a park idea require.
Remember, $3mil demolition is just to foundation level. Demolition to park level would be at least $6mil then you have to build the park and that's all after $12mil to purchase Coco Palms.
A lot of permit work, planning work, and Council testimony went on during the last several months. It was done in plain sight; nothing sneaky at all. Granted, a lot of folks were busy washing red tshirts every day and just didn't notice!
Pete Antonson

Anonymous said...

Condemn Coco Palms as health and safety hazard. Order the owner to clean it up. If the Owner refuses, clean it with county funds, bill the owner for cleanup, lien the property if owner "no pay" and then an auction.
There is a responsibility to ownership and these owners have had a free hand. If you have health/safety hazard on your little lot, the County State comes down hard and forces you to clean it or they clean it and bill you.
Our County officials are afraid to sue people out side of the government, but they sure sue love to sue the County themselves, IE Bynam BS suit, Auditor, various others, County suing County over voter mandated prop tax control.....we are led by self servers with no spine and only seek self glorification and wonderful pension plans.

Anonymous said...

Anybody here, as recently as yesterday, recall the accident?

No where to go when there is one.

These guys are fly-by-nights.
Send them packing. Agor and Kusaka. Geez no wonder.

Anonymous said...

8:02 AM, youʻve made the most sense and the correct call.

Anonymous said...

You can't condemn the property and order the owners to clean up. If the government condemns the property the government owns it.

Anonymous said...

Anonymous December 13, 2013 at 8:51 PM

Hi Chad