Investors pay $7 million for Big Island property
By Andrew Gomes
Advertiser Staff Writer
Investors led by a Hawai'i real-estate development company have bought an 11,000-acre Big Island property from a Japanese firm that abandoned decade-old plans to build 500 house lots and a golf course on the site.
Koa Road LLC, led by Towne Development of Hawaii Inc., paid $7 million for the tract mauka of Captain Cook about 20 miles south of Kailua, Kona, in a deal a Towne official declined to discuss.
Seller Kealakekua Development Corp., an affiliate of Japan-based restaurant chain operator Tokuju Co., had been trying to sell the property for almost two years.
The company, which bought the parcel in 1990 from the Greenwell family for $15 million, had initially asked $27 million for the asset.
Joel LaPinta, a broker with Prudential Orchid Isle Properties who represented the seller, said Kealakekua Development had no use for the land since the company's patriarch and chief master plan promoter died about four years ago.
"Having this big tract of land sitting here that they're not going to do anything with did not make a whole lot of sense," LaPinta said.
Chris Lau, president of Towne Development, declined to comment on the purchase.
The property, known as Kealakekua Ranch, was the subject of a dispute between Kealakekua Development and the state, which in the early 1990s moved to downzone 95 percent of the property to protect critical forestland.
The two sides reached an agreement that called for the property owner to reforest 3,300 acres of the ranch, which is primarily used for cattle grazing.
Koa Road would need to satisfy that requirement if it wants to take advantage of development rights for another roughly 2,700 acres allowed for up to 500 agricultural house lots between 1 and 40 acres, an 18-hole golf course and a 250-acre equestrian center, LaPinta said.
LaPinta also said the property lacks connections to infrastructure such as roads and water — off-site work that he estimated could cost more than $10 million.
Towne Development is an affiliate of Wisconsin-based real estate firm Towne Group, a developer of residential, time-share and commercial projects around the country.
Towne Development projects in Hawai'i include Launani Valley townhomes in Central O'ahu, single-family homes in Kihei, Maui, and the single-family lot project Keauhou View Estates in Kona.
The company also owns the Makaha Golf Club and former Sheraton Makaha hotel, which it bought about three years ago.
