Kapolei industrial area sold for $24M

A local development firm is resurrecting a plan to create a 54-acre industrial subdivision in Kapolei derailed several years ago by the recession.

Avalon Development Co. LLC announcedThursday that it bought the property known as the second phase of Kapolei Business Park for $24 million and plans to offer 17 lots for sale to businesses with industrial space needs.

The lots range in size from 1 acre to 4.7 acres but have not been priced yet. Avalon also is retaining a 26-acre parcel for potentially developing a commercial complex with space for lease.

To create the subdivision, Avalon will need to extend two roads and other infrastructure through the site at an estimated cost of more than $20 million.

Christine Camp, Avalon president and CEO, said the timing appeared right for the project given that the last available lot in Kapolei Business Park’s first phase recently sold, and industrial land is becoming more scarce as places like Kakaako become redeveloped with housing.

"This is an unprecedented time for growth of construction-related industries on Oahu," she said. "With limited land available for private ownership, Kapolei Business Park will be a beacon for small-business empowerment."

Camp said she expects to deliver lots to buyers by the end of the year.

Avalon’s effort comes six years after another developer launched lot sales and prepared to develop the subdivision in an effort that ended in bankruptcy.

LV Kapolei 54 LLC, led by Paul Lambert and Mark Whiting of Lokahi Ventures LLC, bought the property in 2005 for $22 million and in late 2008 held a ceremonial groundbreaking and blessing after receiving nonbinding purchase commitments for 12 lots.

However, the unfolding recession derailed the company’s sale and development plan. LVKapolei filed for bankruptcy in 2011 after defaulting on a roughly $23 million loan.

The developer proposed a Chapter 11 reorganization plan that sought to extend the loan with Central Pacific Bank for three years, but instead the property was sold to a real estate investment firm for $12 million.

The investment firm, an affiliate of California-based Jupiter Holdings, resold the property to Avalon.

Camp said her firm is developing the subdivision with equity capital and no debt. Scott Mitchell, an executive vice president with real estate brokerage firm Colliers International who has been involved with the project since LV Kapolei owned the land, said he expects the project will sell out within the year.