Posted on: Tuesday, October 30, 2001

Sale of Coco Palms Hotel still on track

By Jan TenBruggencate
Advertiser Kaua‘i Bureau

WAILUA, Kaua'i — Despite a series of setbacks, the proposed sale of the Coco Palms Hotel remains in escrow and both the buyer and seller say the sale is still likely to happen.

The venerable hotel, which was severely damaged by Hurricane 'Iniki in 1992, closed several months afterward and has remained closed.

Owner Park Lane Hotels International, based in San Francisco, has agreed to sell the facility to the Lincoln Consulting Group, which is headed by James R. Reed. Terms of the deal have not been disclosed.

The Coco Palms, developed in the 1950s, was the prototype Polynesian resort with thatch-roofed cottages, clamshell bathroom sinks and outrigger canoes hauled up along a historic lagoon — all set within the confines of a large coconut plantation.

Among problems that have delayed the sale, officials with the companies said yesterday, is the fact that Coco Palms is on low coastal land and within tsunami and flooding zones, requiring special attention to building elevations. Reed at one point proposed raising the level of the Coco Palms lagoons along with the surrounding ground area.

In addition, several of the proposed routes for the long-delayed Kapa'a-Wailua bypass road take it through or by the hotel grounds, which could alter design.

Reed said the Sept. 11 terrorist attacks have further hampered progress, delaying "our plans to go forward with the acquisition and redevelopment of this legendary property."

Lincoln Consulting proposes to retain parts of the half-century-old resort, but to replace others, creating a resort that is primarily geared to timeshare sales.

The project has received Kaua'i Planning Commission approvals for 232 timeshare units and 20 standard hotel units, although Reed has said he is considering increasing the size of the hotel portion, and cutting the number of interval-ownership units.