Fourth hotel for Kapolei will cost up to about $70 million to build

The hotel business is booming in Kapolei, so much so that a developer plans to add a fourth hotel in the community — just steps away from two others.

A Utah-based partnership is seeking a city permit to build a 204-unit limited-­service hotel under The Element by Westin brand.

The roughly $60 million to $70 million project is proposed for 3 acres on a block known as Leihano at Kapolei where a 180-room Embassy Suites opened in 2017 followed by a 183-suite Marriott Residence Inn in 2019.

Kapolei also has a 175-room Hampton Inn &Suites that opened in 2016 at the Ka Makana Ali‘i shopping center.

Partners in the new hotel project, Western States Lodging and Garn Development, developed the first two hotels on pieces of the Leihano property and have experienced demand that they believe can support a third hotel.

“We are seeing really good use within the community for these projects,” Tracy Camuso, a planner with local design firm G70 working for the hotel developer, told the Makakilo-Kapolei­-Honokai Hale Neighborhood Board during a presentation in May.

The hotels in Kapolei are attracting local residents, business travelers, sports teams and other customers often seeking more affordable accommodations compared with resort hotels in nearby Ko Olina or in Waikiki.

At the Kapolei Residence Inn, occupancy has been running between 80% and 90% compared with much lower figures in Waikiki, according to Tiffany Nozawa, general manager of the hotel.

Nozawa, who spoke during a city Department of Planning and Permitting public hearing for the project Wednesday, said the hotel employing over 100 people also stayed open during the coronavirus pandemic.

“A lot of people are getting laid off right now, and we are hiring,” she said.

The Element hotel would need about 130 employees. Planned amenities include a dining area for breakfast buffets, a lounge and bar, a food pantry store, a meeting room, a pool, spa and a fitness center.

Rooms in the five-story building would all include full-service kitchens with layouts ranging from studios to something the developer describes as a “studio commons” concept where four hotel rooms connect with a common room that includes a kitchen.

Western States Lodging and Garn Development, which formed Kapolei Hotel Partners III LLC to develop The Element, need a conditional-use permit from the city, which has granted similar permits for the neighboring hotels.

The entire block is zoned for community business mixed use, or BMX-3, which allows moderate-density commercial and residential uses.

Several years ago, city leaders amended Oahu’s land-use ordinance to allow limited-service hotels in areas zoned for mixed use provided a conditional-use permit is obtained.

Almost two decades ago, the 40-acre Leihano block, which is on the outskirts of downtown Kapolei’s commercial core, was planned for a retirement community with 850 homes. But those plans morphed into a more diverse mix of projects.

Besides the two existing hotels, the block includes the 84-unit ‘Ilima at Leihano assisted living complex, a Liliuokalani Trust children’s center, C.S. Wo &Sons furniture stores, a Raising Cane’s fast-food restaurant, a 7-Eleven store, Starbucks and a Hele gas station.

Previously announced plans for the block also include a St. Jude Catholic Church, a National Kidney Foundation facility, a medical office building and a First Hawaiian Bank branch.