Keauhou Resort on Hawaii island has largely shrunk in terms of visitor accommodations over the last decade, with the demolition of two of its three hotels. Now a development firm plans to reverse the trend with a roughly 300-unit time-share project.
Towne Development of Hawaii Inc. is proposing 321 low-rise condominiums for time-share use plus 17 single-family homes on 42 acres at the West Hawaii resort that over its history has struggled to meet the success of the higher-profile neighboring areas of Kona and Kohala.
The company recently submitted a draft environmental assessment for the project to the state.
Project representative William Moore said it will be a year or two before construction can begin if necessary permitting approvals are obtained.
The Towne project would represent the first major addition of vacation accommodations at Keauhou Resort since an 84-unit townhouse project called Na Hale o Keauhou below Keauhou Shopping Center was completed in 2005, according to Kamehameha Schools, the resort’s master developer and original landowner.
Kamehameha Schools started developing Keauhou Resort in the 1960s on 2,400 acres about 5 miles south of Kailua-Kona. In 2004, the trust announced a new vision for the property that would reduce its hotel inventory, increase lower-density residential development, restore numerous cultural sites and establish educational programs tied to the cultural sites.
The trust envisioned recruiting an experienced partner to help execute the development side of the new plan, which was projected to cost $800 million over 20 years mainly for adding 2,200 more residential units to the 1,700 single-family homes, condominiums and time-share units already there.
But the economic recession and real estate market meltdown several years ago set the plan back, and rebounds in Hawaii’s tourism and housing markets have been slower to take hold on the Big Island.
In 2004, the trust demolished the 462-room Kona Lagoon Hotel that had been closed since 1988. Then last year the trust closed the 309-room Keauhou Beach Hotel, citing financial losses over the prior six years. This hotel is slated for demolition.
Only the Sheraton Kona Resort & Spa at Keauhou Bay still operates at the resort.
Towne’s project is in a conceptual phase, but comprises several three-story buildings spread over the 42 acres.
The draft environmental assessment said the project site is mauka of existing rows of four-story buildings and is zoned for residential and time-share development.
Towne has an option to buy the parcel from Kamehameha Investment Corp., an affiliate of Kamehameha Schools.
Development rules within the resort and state requirements will ensure that significant natural and cultural sites, including burials and lava fields spread throughout the property, are protected.
Previous archaeological studies of the property have documented 58 sites with 247 features designated for protection, including walls, terraces, lava tubes, stone mounds, a sinkhole, a burial crypt and a petroglyph.
The state Historic Preservation Division of the Department of Land and Natural Resources has approved site preservation and burial treatment plans.
Towne said in the draft report that traffic on Alii Drive will increase because of the project but that congestion will not significantly increase.
The Hawaii County Planning Department has reviewed the draft environmental assessment and anticipates no significant adverse impacts from the project.
