Outrigger Reef redevelopment request moves to full Council

Outrigger Enterprises Group’s new owners were closer Thursday to their goal of completing a $100 million redevelopment of the Outrigger Reef Hotel in Waikiki by 2020.

The City Council’s Committee on Zoning and Housing approved an amended request to grant Outrigger a special management area use permit and shoreline setback variance to move forward with the project.

Denver-based KSL Capital Partners LLC acquired the fee-simple rights to the Waikiki beachfront resort at 2169 Kalia Road after purchasing Outrigger Enterprises Group from the Kelley family. The deal, which was announced last fall, included some 37 hotels, condominiums and vacation resort properties operated, owned and managed by Outrigger.

KSL plans to continue Outrigger’s plan to demolish the Diamond Head Tower and create a new beach-side lawn and stage. It’ll also construct a new pool deck with meeting and commercial tenant spaces below. A new 60-room saddle tower will connect the existing Pacific and Ocean towers. This redevelopment version was unveiled in June after soaring construction costs caused Outrigger to abandon an earlier plan to build a 32-story hotel tower.

Council member Kymberly Marcos Pine, committee chairwoman, submitted amendments to clarify that the Diamond Head Tower, basement, stairway landing and drainage system as well as the beach-side lawn and recreation deck fall within or encroach into the 40-foot shoreline setback area.

In addition to technical amendments, a provision was added requiring Outrigger to prepare an archaeological inventory survey for the portion of the project located beneath the new porte-cochere. Outrigger also must notify the state Department of Land and Natural Resources if white fairy tern nesting sites are discovered. The company is required to use native Hawaiian plants in landscaped areas wherever reasonable and practicable.

Kathy Sokugawa, acting director of the city Department of Planning and Permitting, said the department did not object to the amendments. There were no other testifiers.

The committee voted the amended version of the resolution out for adoption.

“The full Honolulu City Council still will have to vote on the measure, but this is a significant step forward,” said Blane Yokota, associate general counsel for Outrigger.

Yokota said Outrigger still must pursue a modification of the project’s planned resort development permit, which was approved by the Council in 2002 as part of the Waikiki Beach Walk redevelopment.