Developer seeking third extension for Alii Drive project


A developer is seeking a third time extension for an Alii Drive retail and condo complex.

Diamond Resorts International Inc., formerly Pacific Monarch Resorts Inc., is asking the Leeward Planning Commission for the five-year extension to complete the project south of the Royal Kona Resort and north of Kona Reef Condominiums.

The developer proposes 7,000 square feet of retail space and 48 two-bedroom condos with 115 parking spaces on the roughly 77,000-square-foot lot.

Several factors have played into the delay for the project, which county planning officials first approved in 1998. One was the discovery of a 30-foot-wide lava tube, followed by project design changes, the state’s land court consolidating six lots and changes to Department of Public Works drainage requirements.

“These hurdles were resolved, however within months of the last (Special Management Area) hearing concerning the parcel, the local and national economies entered a catastrophic cycle of decline,” the application said.

Original owner Monarch Grand Vacations went into receivership and the bank handling that case held the property in its portfolio until issues were resolved.

Prior to seeking a five-year extension in 2008, developers had put in about $4 million in improvements to the property, they said.

In 2013, Diamond Resorts International Inc. purchased all the company’s assets, including the Alii Drive property.

Prior to the bankruptcy, Pacific Monarch Resorts was able to pour a foundation, in late 2007.

According to Planning Department records, several Alii Drive residents requested a contested case hearing for the project in 2008, but their applications were rejected for failing to pay a $100 filing fee. According to minutes of the September 2008 Planning Commission meeting, no one testified against the project.

Before Pacific Monarch began developing the property, a golf course and drive-in restaurant were located on the lot. Prior to that, the property was owned by the Keliikoa, Kaiawe, Chong and Carvalho families.

The first time extension was granted in 2003 to Tuso Development and Management Co., of Frisco, Colo. However, Bureau of Conveyances documents show that the property was sold in 2000 to Pacific Monarch by Blue Moana, a company owned by Tuso.

A message left with the Kailua-Kona representative of the project was not immediately returned.