Developers behind the planned rebirth of Kaua鈥榠鈥檚 famed Coco Palms hotel have secured a $431 million loan to reconstruct the 1953 resort where Elvis Presley鈥檚 鈥淏lue Hawaii鈥� was filmed.
Finalizing a deal to secure the money needed to fund construction is 鈥渢he pivotal final step鈥� in moving the stagnant project forward, Jon Day, chief financial officer at Reef Capital Partners, said in an email. The historic hotel has been closed since 1992, when Hurricane Iniki ravaged the island.
Construction is scheduled to begin next year. The project now has a target opening date of 2028 under the name .
X-Caliber, a commercial real estate lender, has agreed to lend the project $186 million in conventional financing and $245 million in financing through X-Caliber affiliate CastleGreen Finance under the , or C-PACE, program.
A C-PACE loan is a financing tool that allows developers to finance clean energy projects through a municipal property assessment. The loan is repaid as a special assessment on the property tax bill so .
鈥楽keptical At Best鈥�
Even with the new infusion of money, public confidence that any developer might succeed in seeing the project through is tenuous. For 30 years developers have pitched plans to revive the hotel ruins.
鈥淚鈥檓 skeptical at best,鈥� former state senator and Kaua驶i council member Gary Hooser said. 鈥淭hese are dealmakers. If you look at the history, it鈥檚 been one developer after another making promises with almost no results.鈥�
First promised in 2017, a second coming of Coco Palms has been mired in postponements and political obstacles. A string of developers have tried to push the project forward in the face of lawsuits, protests, expired permits, state land use violations and concerns over Native Hawaiian burial grounds. Meanwhile, cost estimates have crept upward and construction timelines have leapt ahead.
A Facebook page created by a former Coco Palms tour guide hired by the developer to herald the resort鈥檚 planned renaissance lit up this week after the financing deal announcement. Most of the comments showed excitement but displayed varying degrees of faith that the rebuild might now actually happen.
鈥淟ong live the beautiful and iconic Coco Palms!鈥�
鈥淥h wow, just can鈥檛 wait. But hurry up as I鈥檓 getting too old to travel that far.鈥�
鈥淥ne can only pray this happens this time.鈥�
Developers have secured all of the zoning permits required for the redevelopment project, Kaua鈥榠 County officials said. A multimillion-dollar demolition project began on the site in 2024, resulting in the removal of three large concrete buildings and other smaller structures.
The developer is soliciting bids from subcontractors to demolish the old wooden retail building that fronts K奴hi艒 Highway. After that, work is expected to begin to install utilities and restore the underground parking garages. Residents can expect to see a couple dozen workers on site starting in late summer or early fall, Day said.
鈥淚 sometimes get frustrated when critics say nothing has happened on the site 鈥� those concrete structures didn鈥檛 demolish and recycle themselves,鈥� Day, whose firm is leading the development, said in an email. 鈥淏ut I understand that people are excited for the vertical construction and I am, too.鈥�
Major construction is slated to start up in early 2027. The developer anticipates that the project will create more than 1,000 construction jobs and another 350 full-time jobs once the resort opens.
Hopes for its restoration have hinged on a county ordinance that allowed property damaged by Hurricane Iniki to be rebuilt in compliance with the county rules and permitting requirements in place at the time of the storm.
The current permits to rebuild Coco Palms were approved before what鈥檚 colloquially known as the Iniki ordinance sunset in 2015. So although the hotel ruins sit across the highway from a vulnerable coastline fortified by an old seawall, the hotel redevelopment project does not have to comply with newer county rules, such as its that aims to defend new construction from a watery demise as sea levels rise from climate change.
Hooser, who opposes the project and , faults the county rules that allow the hotel to be restored under outdated building and zoning standards.
鈥淭he hotel sits right on a four-lane highway,鈥� Hooser said. 鈥淚t鈥檚 in a flood zone. It鈥檚 in a tsunami zone. It would never be allowed to be built there today.鈥�
Traffic is another issue. The hotel sat on a once-quiet stretch of K奴hi艒 Highway that over the decades has become notorious for traffic bottlenecks. Residents worry that reopening the hotel will further complicate daily commutes.
Project proponents tend to share a wistful affection for yesteryear. The hotel conjures the romance of youth for those who wed, honeymooned or vacationed there. Through the lens of Hollywood, Coco Palms is immortalized in at least a half dozen feature films as a backdrop for sun- and surf-inspired fantasies, often ignoring the island鈥檚 social and political tensions. Frank Sinatra, Bing Crosby and Rita Hayworth were regular guests of the hotel during its golden era.
The pitfall of this nostalgia is that it papers over the property鈥檚 cultural distinction as a burial ground for Hawaiian royalty, said Mason Chock, a community advocate and former councilman.
Dozens of human remains were unearthed on the property in the 1970s. Today there is a grassroots movement that aims to preserve the former Coco Palms site not as an ode to Elvis but as the island鈥檚 ancient religious and political capital.
It鈥檚 likely that additional Hawaiian burials, human remains and artifacts exist on the property that have not yet been discovered, according to , a community-based nonprofit organization that wants to preserve the site.
鈥淥f all places to have a hotel, that is the wrong place to have it,鈥� Chock, an I Ola Wailuanui board member, said. 鈥淚 don鈥檛 want to dishonor the history of this hotel where people had their honeymoon and our parents celebrated their anniversaries 鈥� that鈥檚 part of our history, too 鈥� but at the time it was acceptable. For many of us, now it鈥檚 not. We just didn鈥檛 know then what we know now about how special and unique this place is.鈥�
Whether the resort should be rebuilt is a question that Kaua鈥榠 officials and residents have been grappling with over for decades. Whether the Coco Palms revival will ever actually take shape is another question entirely, and the large loan secured for the project this week appears to hint at its answer.
鈥淭his is the next turn in a long, long drama,鈥� Chock said. 鈥淎nything could happen.鈥�
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