Court approves 1250 Oceanside’s reorganization plan
Hawaii County could have the $20 million it needs to finish the Mamalahoa bypass within five weeks.
Deputy Corporation Counsel Joseph Kamelamela said Tuesday a U.S. Bankruptcy Court judge’s ruling should be finalized in one to two weeks, with the payment coming to the county two to three weeks later.
“Hopefully there’s no surprises from now until that time,” Kamelamela said.
Judge Robert J. Faris on Monday approved the reorganization plan, submitted by Sun Kona Finance I, the investment firm that acquired Bank of Scotland’s loans to the longstalled Hokulia project, and 1250 Oceanside Partners, Pacific Star Company LLC, and Front Nine’s.
This approval is a huge step for the project, which developers promised to West Hawaii residents as a community benefit for the luxury subdivision, and for the county, Mayor Billy Kenoi said.
“We’ve still got a few weeks to go,” he said. “Certainly this is good news.”
He praised the Corporation Counsel’s office for their work in pursuing the funding, taking Oceanside and its bonding company to court several years ago.
“We had to litigate,” Kenoi said. “Now this final step … allows us to finalize and move forward our plan to construct the road. We would have completed the road regardless, (but the bankruptcy reorganization plan) allows Hokulia to fulfill its obligations to the community.”
Rick Robinson, Oceanside’s restructuring officer, said company officials were excited to be able to make the $20 million payment and move ahead with the project.
“It’s been a long process,” Robinson said. “We want to be good citizens and do what’s right.”
He said construction could start on the undeveloped lots in about a year. First, Oceanside officials will need to resume the planning and permitting process, work on the sewage treatment plant, renovate the clubhouse and install water and electrical systems. They will also need to re-inter several sets of human remains removed during earlier construction phases.
Construction will resume gradually, he said.
“You always hope that it’s going to be a good time, but the real estate market is not certain,” Robinson said. “It feels like it’s the right time.”
Oceanside filed for Chapter 11 bankruptcy protection in 2012, after defaulting on nearly $1 billion in secured debt owed to the Bank of Scotland. In October 2008, the Bank of Scotland separated the various debts, leaving about $494 million in Hawaii-based debt, secured by Hokulia and a related development at Keopuka, according to court records.
Sun Kona Finance I LLC acquired Bank of Scotland’s loans in late 2012.
The Public Works Department opened bids for the remainder of the bypass, which will run from the intersection with Halekii Street to the Napoopoo Road junction, last month. Isemoto Contracting Co. Ltd. had the lowest bids, estimated $13.5 million for an asphalt road or $14.8 million for a Portland cement concrete surface and $13.1 million for the work at the Napoopoo Road intersection.
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