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The Honolulu Advertiser
Posted on: Monday, September 14, 2009

South Point resort development eyed


By Andrew Gomes
Advertiser Staff Writer

An O'ahu contractor is reviving plans for a coastal resort near South Point in the Ka'u district of the Big Island.

The head of 'Aiea-based general contractor SteelTech Inc., Val Peroff, is preparing an environmental impact statement for the project envisioned for up to 1,970 homes or residential lots, 950 resort hotel or condominium units, a 36-hole golf course and an airstrip.

A shoreline preserve, land for agriculture or renewable energy production, a commercial village with schools and a cultural research and demonstration center are also part of the plan, called Kahuku Villages, slated for the site covering 16,457 acres, or nearly 26 square miles, of mostly barren lava.

The developer, doing business as Nani Kahuku 'Aina, filed an environmental impact statement preparation notice with the state last week, a filing that included some details of the plan.

No cost estimate was included, but the developer hopes to begin construction in 2012 and substantially complete Kahuku Villages in three phases over 10 years.

To proceed, the project would need state Land Use Commission approval, a county zoning change and other permits.

Peroff, listed as president of Nani Kahuku, could not be reached for comment. Katherine Peroff, company vice president, also could not be reached.

Kahuku Villages named after the Kahuku ahupua'a, or uplands-to-sea land division in the area includes several similar elements of a nearly $1 billion unrealized luxury resort pursued for roughly the same property in the late 1980s.

The prior project, called Hawaiian Riviera Resort, was proposed by Lebanon-born Charles Chidiac with 3,000 vacation units, 927 residential units, 36 holes of golf course, an air strip, a marina with 400 slips and a cruise-ship dock on about 20,000 acres.

Chidiac, as head of Palace Development Corp., bought the Kahuku Villages site for $42.5 million in 1989 from a Maui-based partnership. Land Use Commission approval for an initial phase of the project was granted in 1991.

The commission approvals later made headlines when Chidiac alleged corruption within the commission, but an FBI probe was dropped in 1994 for a lack of evidence.

Financial troubles and a deteriorating economy led Chidiac to default on mortgage payments, and the undeveloped property was reclaimed by the Maui partnership in 1995. According to property records, real estate investor Joseph Daneshgar of Beverly Hills-based 3D Investments bought the site in 2004 for $6 million, and sold it three years later to Peroff for $13 million.

Prior LUC approvals are no longer valid on the property, which is classified for agriculture and conservation use.

Hilo resident Gil Kahele, who challenged the Hawaiian Riviera project as head of community group Pa'a Pono Miloli'i, said he still has concerns about cultural and natural resources on the property, and also questions building in an area that could be threatened by lava.

He said he looks forward to a thorough environmental review and will reserve comment on Kahuku Villages until more details are available. Kahele did note that considerable opposition to the earlier project surrounded the marina, not a feature of Kahuku Villages.

Nani Kahuku plans to petition the commission to reclassify about 4,760 acres, or 29 percent, of the property, for urban and rural use, including 3,670 acres of conservation land.

Most of the land is lava, with pockets of vegetation, including an 'ohi'a forest. Pohue Bay along the property's shoreline is a site used by researchers trying to protect the endangered hawksbill turtle under a wildlife restoration project for which Nani Kahuku received a $106,920 federal grant two years ago.

The inland half of the property is next to Hawaiian Ocean View Ranchos, a mostly undeveloped subdivision of 1,229 residential lots. Further inland is the 10,697-lot subdivision Ha-waiian Ocean View Estates that is more developed.

Nani Kahuku, in its filing, said its project would create jobs in Ka'u that have been badly needed since the end of sugar production there, while keeping most of the property undeveloped and protecting natural and cultural resources.

The developer also said it hopes to power the project with alternative energy if feasible.

A "low-key" resort would be the project's economic linchpin, and is aimed at visitors seeking a remote get-away with opportunities to learn about turtle habitat and pre-contact Hawaiian cultural practices. "Although there may be some transient accommodations of higher exclusivity, there will also be eco-lodges (tentalows or cabins) affordable to the general public," the filing said.

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