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The Honolulu Advertiser
Posted on: Monday, May 3, 2010

Plan advances for 1,400 Maui homes

by Andrew Gomes
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser
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A developer is advancing a more than three-decade effort to establish a master-planned community adjacent to Wailea and Mākena resorts in South Maui.

Honua'ula Partners LLC recently filed a draft environmental impact statement with the state in its push to build 1,400 homes and a golf course on 670 acres once used for cattle ranching.

The filing is a major step taken by Honua'ula Partners toward developing the site following failed attempts by three prior landowners. Still, the project which is opposed by some Maui residents over issues including water supply, native habitats and traffic faces hurdles.

According to the environmental report, the estimated $1.2 billion project formerly known as Wailea 670 is projected to deliver initial homes in 2016 and be built out by 2022.

Half of the homes would be priced at levels qualifying as affordable workforce housing under county guidelines, according to project representative Charlie Jencks.

A town center is proposed with about 75,000 square feet of commercial and retail space. Another roughly 25,000 square feet of commercial and retail space would be included in a clubhouse complex for the 18-hole golf course designed for use by homeowners.

The site is viewed by the developer and some supporters as appropriate for urban development, but some conservation groups are critical about elements of the plan.

Maui Tomorrow said Honua'ula will expand "luxury sprawl" in South Maui. "It's just a shame to take this place and turn it into a golf course," said Lucienne de Naie, a Maui Tomorrow board member and vice president of the state chapter of the Sierra Club.

De Naie believes the developer has an inadequate plan to protect native plants and cultural sites on the property. About 140 acres would be devoted to plant preservation, but de Naie said the area is fragmented and isn't ideal for long-term viability of species.

Another issue raised by Maui Tomorrow is water supply. The developer plans to supply Honua'ula with four existing wells initially, then add two or three more new wells as development proceeds. The four existing wells, which are permitted by the state Commission on Water Resource Management, contain brackish water that would be used for irrigation. To produce potable water, a reverse osmosis system is envisioned.

Traffic is less of a concern, though de Naie said it could be a significant problem with the proposed expansion of Mākena Resort.

The developer said benefits of the project include satisfying future housing needs, including 700 affordable-priced units, several hundred jobs both during and after construction, increased tax revenue and more than $29 million in impact fees for parks, a school, police station, traffic improvements and other uses.

The project still needs some county approvals. If Honua'ula gets built, it would bring urban use to a property eyed by a string of developers dating back to the 1970s.

One of the earliest interested parties was Taiyo Fudosan Kogyo Co. Ltd., a Japan-based land development firm that bought the property in 1973 for $6 million, according to state records.

In 1986, Mainland resort development firms Grand Champions and VMS Realty Partners bought the property for $15 million and pursued plans for two golf courses and a mix of 2,150 to 2,650 residential and lodging units. At the time, the developers described the site as a logical extension of the Mākena-Wailea resort area.

An EIS was completed, but Grand Champions-VMS ran into financial difficulty and sold the property in 1990 for $51 million to Palauea Bay Partners, a firm that included local real estate executives Mike McCormack and Dick Bradley.

Palauea Bay Partners planned to develop 1,700 to 2,000 homes around two golf courses, and obtained state Land Use Commission approval to urbanize the pasture land in 1994. A new EIS was completed, but again the owners ran into financial problems. In 2000, the property was sold for $17 million to a group including Mainland firm Woodridge Capital.

The Woodridge group encountered some difficulty several years ago, but worked through challenges and in 2007 replaced investors including investment banking firm Lehman Bros. with other investors.

A year later, Honua'ula gained a key county land-use approval in a close vote by the County Council, and also garnered support from Mayor Charmaine Tavares, though the project remains a contentious issue among many residents.