Kamehameha unveils $800M Kona project
By Kevin Dayton
Advertiser Big Island Bureau
KEAUHOU, Hawai'i — Kamehameha Schools yesterday announced a master plan for 2,400 acres at Keauhou in Kona that would involve an $800 million investment at the resort and luxury residential property during the next 20 years.
The plan emphasizes cultural and educational sites and activities to such a degree that estate executives are characterizing it as a new type of resort development.
The concept is to draw Hawai'i residents as well as visitors into the area as part of a plan to "restore Hawaiian presence and living culture on the lands," said Louis A. Kau, president of Kamehameha Investment Corp., the school's for-profit development subsidiary.
The plan covers developed land as well as raw acreage. Three hotels are there, as well as 1,631 homes made up of single-family, multifamily and time-share units.
The plan would reduce the number of hotel rooms at Keauhou, while adding about 2,200 residential units. The largest reduction in hotel rooms will be caused by the demolition of the 462-room Kona Lagoon Hotel, which has been closed since 1988.
The seven-story structure is scheduled to be torn down in May, and Kamehameha Schools plans to restore the hotel grounds to open space for a cultural park.
The school's Keauhou lands include cultural landmarks such as the Lekeleke burial ground for 350 warriors who died in the Battle of Kuamo'o in 1819; the birthplace of Kamehameha III; and a house site for the Chief Umi.
The development plan calls for restoration or stabilization of Heiau Ke'eku near the ocean and another heiau farther inland, and protection of more than 100 acres of archaeological sites scattered across the property.
The plan also calls for eliminating a quarter-mile section of Ali'i Drive along the coast at Kahalu'u Beach Park, and re-routing traffic to a new highway being planned farther mauka. Foot traffic would still be allowed in the makai area, Kau said.
The land under the current Ali'i Drive alignment and surrounding the Ohana Keauhou Beach Resort would be redeveloped into a community learning center for cultural exhibitions and classes, and a marine interpretive facility, according to the plan.
Money-making components of the project include a 25,000-square-foot oceanfront commercial center next to the former Kona Surf Hotel. The hotel is undergoing renovations and is scheduled to reopen this year as the Sheraton Keauhou Resort & Spa.
The overall project would be low-density by resort development standards, and would sell for prices in the luxury range.
Kau said condominium units likely would sell in the $450,000 to $650,000 range, with single-family homes starting at about $750,000. Homes on select lots nearest the ocean would likely sell for as much as $4 million, he said.
Susan Todani, director of investments in Kamehameha Schools commercial assets division, said Kamehameha Schools will develop Keauhou with an outside partner that has not yet been selected.
The decision to use an outside entity rather than Kamehameha Investment to develop the property likely will lead to the elimination of Kamehameha Investment, she said, although that decision has not been finalized.
Kamehameha Investment has 15 employees.
Reach Kevin Dayton at (808) 935-3916 or kdayton@honoluluadvertiser.com.
