Sale of Kaua'i hotel in works
By Andrew Gomes
Advertiser Staff Writer
A Northern California boutique hotel operator is trying to buy the Kaua'i Coconut Beach Resort as part of a company expansion plan that could bring $20 million in renovations to the 312-room hotel.
Fairfield, Calif.-based Presidio Hotel Group LLC has a contract to buy the leasehold hotel from longtime owner Pleasant Travel Service for an undisclosed price, according to more than one person familiar with the deal.
Chris Johnson, operations director for Pleasant Travel subsidiary Hawaiian Hotels & Resorts, which operates the Coconut Beach hotel, confirmed the property is being sold but declined to discuss details because the sale is subject to closing.
Sushil Patel, a principal and managing director of Presidio, declined to comment.
Two people with knowledge about the purchase said Presidio is arranging financing and the sale could be completed as early as next month, or it could take longer or fall through.
For property tax purposes, the county values Coconut Beach leasehold improvements at $12.1 million. The land under the hotel is owned by Niu Pia Farms.
If Presidio is successful, the company is expected to spend as much as $20 million renovating the independent hotel and branding it with a major hotel franchise name.
The Presidio deal is at least the second attempt in three years to purchase the hotel, set amid a coconut grove on 10.5 acres in Kapa'a's Coconut Plantation district near Lihu'e Airport.
In October 2000, Pleasant Travel was pursuing a sale to San Diego-based Pacifica Host Hotels for $13.5 million. That deal fell through.
If completed, Presidio's purchase would help improve what Kaua'i visitor industry officials characterize as an area of eastern Kaua'i developing between the better-known resort areas of Princeville and Po'ipu.
Not far from the Coconut Beach hotel along Waipouli Beach, a Kapa'a developer plans to build a 196-unit time-share development, a project that recently received Kaua'i Planning Commission approval.
"That area is growing," said Sue Kanoho, executive director of the Kaua'i Visitors Bureau. "We're really looking forward to somebody purchasing (the Coconut Beach hotel) and putting some tender loving care into it. That property, with a little bit of work, can really become a flagship for that area."
The hotel was built in the late '70s in a plantation-era style, and once managed under the Sheraton name. California-based Pleasant Travel, parent company of the state's largest wholesale tour operator, Pleasant Hawaiian Holidays, acquired it in the early 1980s. Rates range from $160 to $280 a night.
The Coconut Beach is one of three Neighbor Island hotels owned by Pleasant Travel. Johnson said the company has no plans to sell the other two — Royal Lahaina Resort on Maui and the Royal Kona Resort on the Big Island.
Presidio is a small, growing hotel developer and operator looking for expansion opportunities. According to the company, it was established by Patel and his father, a career hotelier, in 2000, two years after they acquired the Holiday Inn Select hotel in the Fairfield-Napa Valley area.
Since then, the company has acquired two other Northern California hotels and developed the Hilton Garden Inn in Napa. A fifth, the Rivage Hotel Riverfront in Sacramento, is scheduled to open late next year.
According to the company, Patel is overseeing a plan to grow hotel operations beyond the San Francisco area by acquiring, building and managing upscale franchised hotels in the western United States.
The Coconut Beach hotel, if acquired, would be Presidio's largest, roughly double the size of its 142-room Fairfield-Napa Holiday Inn Select.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
