Construction has halted on the Hale Ka Lae luxury condominium in Hawaii Kai after the lead investor failed to obtain financing for the roughly $300 million project with 242 units.
An affiliate of South Korean firm Hanwha Group, which assumed control of the project formerly known as Hale Ali’i about two years ago, announced the stoppage Monday.
The move marks the second time in three years that construction has been called off after sales efforts were launched.
The recent sale effort began in February with units priced from $685,265 to $3.4 million.
Developer Hale Ka Lae LLC said sale results weren’t a factor in the move to stop construction.
"Sales were actually going OK," said a spokeswoman for the company, Monica Salter.
Of 80 units released for sale in February, buyers reserved 75, the developer said.
Salter said Hanwha had largely funded the project to date, but a deal for a loan fell apart amid global financial market stresses.
Hanwha called the suspension temporary but didn’t estimate whether or when it might obtain replacement financing.
Interested condo unit buyers who paid deposits will automatically receive full refunds.
The developer said a plan to convey five acres previously slated for the project to The Trust for Public Land as a cultural preserve will proceed. An effort to build affordable senior housing at Lunalilo Home nearby in Hawaii Kai also will continue in order to satisfy a city requirement that the project produce affordable housing.
Construction to date has primarily been site preparation work — not vertical construction on the 10-story complex.
The developer had previously anticipated that the condo would be completed in late 2013.
The latest setback follows a rough start for the project initiated about nine years ago by local developer Mike Klein.
Klein launched sales in 2009 and expected construction to start last year, but he encountered trouble over treatment of archeological features on part of the property, including petroglyphs, rock walls and remnants of a coconut grove that some preservationists consider part of a heiau complex. The original developer graded part of the site without proper approvals, including an archaeological monitoring plan, and at one point threatened to sue community members for making alleged defamatory statements.
Hanwha patched up community relations last year, redesigned the condo, reduced prices and relaunched sales.
Hanwha is a conglomerate engaged in an array of industries including construction, industrial products, solar energy, resorts, auto parts, life insurance, fashion and banking. The company reported $26 billion in sales last year. Among present projects is a tentative $7.25 billion deal to build 100,000 public housing units in Iraq.
