Kamehameha planning Keauhou residental project
By Andrew Gomes
Advertiser Staff Writer
Kamehameha Schools is rekindling residential development efforts at its Keauhou Resort on the Big Island in a move to get in on the robust home selling market sweeping the Islands.
Estate subsidiary Kamehameha Investment Corp. is seeking permits to develop 200 to 300 multifamily units on 38 acres at two locations at the resort south of Kailua, Kona.
The projects, at a combined estimated development cost of $40 million to $50 million, would be the first residential product introduced at the resort since the mid-1990s, said Kamehameha Investment President Louis Kau.
Kamehameha Investment's initiative is being made in conjunction with an updated resort master plan scheduled for completion early next year.
The trust arm is also planning to demolish the long-abandoned Kona Lagoon Hotel to make way for a cultural park, while Mainland investors plan to renovate and reopen the shuttered Kona Surf Resort & Country Club next year.
All the work, which also includes public and private construction of new roads leading to Keauhou, has the potential to reawaken the more than 30-year-old resort.
"It's got plenty potential," Kau said. "It's just the market has not been good to it, and a lack of direction — not knowing exactly what we wanted to do. Now we know what we want to do. It's just a matter of doing it."
The two residential projects will be marketed mainly as second homes to visitors, with townhouses, duplexes and 4-plexes likely priced between $200,000 and $900,000, Kau said.
Kamehameha Investment will enter a competitive market, with several residential projects above and below Keauhou, such as Hokuli'a to the south, Schuler Homes' Pualani Estates in Kailua, Kona, and several luxury subdivisions being built farther north at Hualalai, Waikoloa, and Mauna Lani resorts.
According to area brokers, demand has been strong for everyone. For instance, on one Saturday in September, 85 interested buyers lined up to reserve 15 single-family homes in the first phase of the 269-home Pualani project.
"This is an extremely positive sign that the real estate market is alive and well on the Big Island," said Barrie Parker, Pualani sales manager.
Ed Rapoza, president of Maryl Realty Inc., said there are several hundred more homes in the planning stages or ready to start construction along the Kona Coast.
"It's been a very busy real estate market," he said.
Despite all the plans, residential real estate researcher Ricky Cassiday said he doesn't see the market slowing in the next couple of years when Kamehameha Investment expects to hit the market with its Keauhou homes.
"I think there's a strong second-home market in the lower price point, and I think that's going to go on, and on, and on," he said.
Kau said that if the permitting process goes smoothly, Kamehameha Investment could start sales on the first of two parcels in about 15 months, followed by construction nine months after that.
Kamehameha Investment recently updated a special management area permit for most of a 24-acre site above Keauhou Shopping Center. The other site, 14 acres below the center, requires a similar permit.
There are about 1,300 homes at Keauhou Resort today, mostly built in the 1970s and 1980s. It is envisioned that the 2,300-acre resort will be built out with another 1,700 homes.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
