Developers behind the planned rebirth of Kaua‘i’s famed Coco Palms hotel have secured a $431 million loan to reconstruct the 1953 resort where Elvis Presley’s “Blue Hawaii” was filmed.Finalizing a deal to secure the money needed to fund construction is “the pivotal final step” in moving the stagnant project forward, Jon Day, chief financial officer at Reef Capital Partners, said in an email. The historic hotel has been closed since 1992, when Hurricane Iniki ravaged the island. Construction is scheduled to begin next year. The project now has a target opening date of 2028 under the name Coco Palms, A Kimpton Resort.X-Caliber, a commercial real estate lender, has agreed to lend the project $186 million in conventional financing and $245 million in financing through X-Caliber affiliate CastleGreen Finance under the Commercial Property Assessed Clean Energy, or C-PACE, program. A C-PACE loan is a financing tool that allows developers to finance clean energy projects through a municipal property assessment. The loan is repaid as a special assessment on the property tax bill so it’s tied to the property, even if it’s sold.
‘Skeptical At Best’Even with the new infusion of money, public confidence that any developer might succeed in seeing the project through is tenuous. For 30 years developers have pitched plans to revive the hotel ruins.“I’m skeptical at best,” former state senator and Kauaʻi council member Gary Hooser said. “These are dealmakers. If you look at the history, it’s been one developer after another making promises with almost no results.”First promised in 2017, a second coming of Coco Palms has been mired in postponements and political obstacles. A string of developers have tried to push the project forward in the face of lawsuits, protests, expired permits, state land use violations and concerns over Native Hawaiian burial grounds. Meanwhile, cost estimates have crept upward and construction timelines have leapt ahead.
