Kona Village Resort is looking at reopening in 2019 after the resolution of financial and land lease issues at the luxury Hawaii island vacation destination, which has been closed since 2011 because of tsunami damage.
The firm that owns the resort, Kennedy Wilson, and landowner Kamehameha Schools are announcing today that a final agreement has been reached on ground lease terms that will allow Kennedy Wilson to begin immediate work on rehabilitating the property that opened in 1965 and includes 125 vacation bungalows on 81 acres along the Kona Coast. Kennedy Wilson is a California-based real estate investment and development firm.
Kennedy Wilson plans to rehabilitate all the bungalows and improve the infrastructure and other parts of the idled resort. A complete reopening is anticipated by summer 2019.
“Kennedy Wilson is humbled to become the next steward of the iconic Kona Village Resort,” Dave Eadie, a company representative, said in a statement. “We take great pride in the fact that returning the Kona Village Resort to full service will provide stable jobs for scores of Hawaii island residents.”
Walter Thoemmes, managing director of commercial real estate for Kamehameha Schools, added, “This agreement is a testament to the commitment and diligence of all parties that will reconnect the resort with the Kona community.”
The new lease clears the way to resume repair and renovation work that had been derailed by a dispute between the resort’s former owner and two lenders, one of which was Kennedy Wilson, in the aftermath of a tsunami that wrecked much of the resort.
The tsunami, triggered by a magnitude 9.0 earthquake off Japan, damaged gas, water, electrical and wastewater lines along with about 20 of the 125 bungalows, two restaurants, the main office and an ocean activity center. About 200 workers were laid off.
Then-owner Kona Village Investors LLC, a partnership affiliated with computer mogul Michael Dell and investment management firm Rockpoint Group LLC, vowed to rebuild. But in September 2013, after restoration work had begun, the resort’s top executive alleged that Kennedy Wilson and Deutsche Bank Trust Co. refused to release insurance money for the work.
In November 2013, the two lenders filed a foreclosure lawsuit against Kona Village Investors, and later Kennedy Wilson took over the damaged resort in lieu of foreclosure.
