Liliuokalani Trust moves forward with 70-acre mixed-use development

KAILUA-KONA — A $65 million proposal to construct hundreds of residential units and hotel rooms, as well as commercial and community space, in Kailua-Kona is making headway.

Touted as the “development, enhancement and refinement” of acreage in the downtown Kailua-Kona area, the Liliuokalani Trust, is looking to transform 69.1 acres in downtown Kailua-Kona into what is being called the Makalapua Project District.

Included in the plans for the mixed-use project are approximately 300 residential units, 220 hotel rooms split between two hotels, 50,000 square feet of community performance space, 470,000 square feet of commercial space and open space on acreage bordered by the Kona Commons Shopping Center to the northeast, vacant land to the north, the Old Kona Industrial Area to the east and Kailua Park, also known as Old Kona Airport Park, to the south and west. A “major retail center” would anchor the project.

“The project includes a diverse range of live, work, shop and play concept types of uses that are intertwined,” said Liliuokalani Trust Development Manager Mike Shibata. “We think it will help support the livability of Kona.”

It’s also needed to meet demand for housing, retail, commercial, recreational and public service facilities in the West Hawaii region, which has been growing at a faster rate than the county and state as a whole, according to the assessment. Between 2000 and 2010, Kailua-Kona’s population increased by 21.3 percent, compared to just 12.3 percent in the state. Between 2010 and 2040, Hawaii County’s population is expected to grow by 59.8 percent, compared to 25.3 percent statewide.

The project is also in alignment with the Kona Community Development Plan and the long-term goals of the trust, a nonprofit public benefit organization established by Queen Liliuokalani in 1909 to improve the welfare of orphan and other destitute children in Hawaii, and its Keahuolu land holdings, Shibata said.

“We are a nonprofit, and you know the revenues that we bring in both from the real estate and investment portfolio go to support the community’s orphaned and destitute children of Hawaii. This is a big component of that,” Shibata said. “We feel this project is in alignment with the community plan and input from the residents.”

Draft details

A 995-page draft environmental assessment for the project was released Wednesday, kicking off a 30-day public comment period. The Hawaii County Department of Planning anticipates it will give the project a finding of no significant impact, allowing it to move forward when the final environmental assessment is released.

Liliuokalani Trust expects it will take 15 years to complete the project in its entirety. However, the trust expects to complete a significant portion of the project within 10 years.

After meeting all environmental requirements, the trust will have to secure a state land use designation change of 14.96 acres from agriculture to urban to match the other 54.14 acres, county rezoning of all the acreage to project district to allow for residential units and hotel rooms, and a special management area permit from the Leeward Planning Commission.

“We are going to be doing the EA, and will obtain necessary entitlements for the project,” Shibata said. “We will be in talks with potential development partners.”

If everything goes as planned, Shibata said work could start as early as late 2018 or early 2019.

Kailua Village Business Improvement District Executive Director Debbie Baker said the organization supported the early review of the proposal and that the board of directors would be reviewing the draft EA.

“KVBID’s Board is looking forward to reviewing the detailed plans of this new mixed-use project and its related community amenities that are discussed in the draft Environmental Assessment,” she said in an emailed statement.

Neighbor concerns

The release of the assessment and the details of the project came as a surprise to some area business owners, one of whom had heard about a road being built, but was unaware of the extent of the plans.

Dale Porter, who opened Daleco back in 1982 in the Old Kona Industrial Area, leases warehouse space for his business at the Kona Trade Center, which falls within the district. The planned extension of Pawai Place would extend the roadway across Kaiwi Street, through the parking area for his business, and at least a half dozen other businesses, leaving him concerned whether he will have parking for his customers or whether he’ll be able to keep Daleco in such a central location.

“It’s gentrification. It’s going to impact a lot of people’s families,” he said of the proposal after seeing them for the first time shortly after noon Wednesday.

“If these two buildings are eliminated,” Porter said, referring to the warehouses off Kaiwi Street, before ending mid-sentence and making an “I don’t know” gesture.

“If they leave the buildings here then it would probably be a positive, but if they take them out it’s going to make the prices more expensive,” said Porter of rent prices in the industrial area.

“This is my livelihood,” said Abe Kaaihue, who’s worked at Daleco for about a decade and is now manager. “I would be pretty upset if I lost my livelihood. I’d probably be the first person on the protest line with a sign.”

Shibata said the trust has no immediate plans to change the industrial area outside the project district. When asked about the warehouses in the district, Shibata said the proposal would likely undergo additional refinement and more details would come out as the trust moves forward with the project. BMW of Hawaii, which is also within the proposed project district, currently has a long-term lease with the trust.

“We feel there’s 10 to 20 years where the focus will be on developing this area,” Shibata said. “I think the benefits will also help the industrial area as well. When you have additional residents coming in, and visitors coming in as well, taking advantage of that, I think, it will help the larger community.”

Roads extended, added

The extension of Pawai Place into Pawai Drive is among a handful of roads that would be added as part of the project. The roads, to include extending Maa Place as well as Kuakini Highway to up Loloku Street and north makai of Target as well as constructing three new access roads to Kailua Park, one of which would connect to the realigned Kuakini Highway north and makai of Kona Commons, are part of what the project is calling a pedestrian-oriented street network.

The 300 residential units could either be rented and/or owned and would be built in multi-family format, according to the assessment. They would be situated between Kuakini Highway and what would become Pawai Drive, as well as along the northern most park access road that would be constructed.

There is no mention of the average cost of a unit in the assessment; however, the “affordability concept” will be part of the project, Shibata said.

One of the proposed hotels would be situated across what is now Loloku Street from the BMW of Hawaii dealership while the other would be located farther north.

Originally, the proposal was for one 180-room hotel, 470,000 square feet of commercial space and 180 multi-family homes, according to an April 2016 West Hawaii Today article.

An archaeological inventory survey of the land found 16 sites with 29 features; three of which required treatment according to the assessment. The trust plans to create a monitoring plan and implement monitoring throughout the construction of the entire 69.1-acre project district.

How to comment

Comments on the draft assessment are due by April 7 to the County of Hawaii Planning Department, Daryn Arai, Deputy Planning Director, 101 Pauahi St., Ste. 3, Hilo, HI 96720, or Daryn.Arai@hawaiicounty.gov. Copies should also be sent to the Liliuokalani Trust, Michael Shibata, 1100 Alakea St., Ste. 1100, Honolulu, HI 96813, or MPD@onipaa.org, as well as the consultant, Munekiyo Hiraga, 305 High St., Ste. 104, Wailuku, HI 96793, or planning@munekiyohiraga.com.

View the document online at goo.gl/00sq5J.