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Apr 18, 2016

Queen Liliuokalani Trust eyes hotel, commercial, residential community in Kona Industrial Park

By Bret Yager

West Hawaii Today

KAILUA-KONA — The Queen Liliuokalani Trust has sketched out an ambitious plan for developing 70 acres sandwiched between Kailua Park and the Kona Commons Shopping Center.

A 180-room hotel, 470,000 square feet of commercial space and 180 multi-family homes are included in the proposed Makalapua Project District, along with a realignment and extension of Kuakini Highway and the creation of three access routes into Kailua Park.

The development is laid out in the form of a village connected by pedestrian routes and 50,000 square feet of community land, said LeeAnn Crabbe, vice president for the trust.

“We are looking at it more holistically rather than parcel-by-parcel leases,” Crabbe said.

Guided by the popular mixed-use development concept known as “Live, Work, Play,” the project would mingle homes, businesses and entertainment venues to create a diverse experience for residents and visitors.

The design for the area hasn’t yet been created, and the trust hopes to finish the entitlement process by the end of 2017, Crabbe said. An environmental assessment of the land is underway, and a request for feedback on the plan went out to affected properties earlier this month.

But some nearby shop owners who have leases through QLT expressed concern about how the neighboring light industrial uses and a natural gas facility will mesh with the residential component. Business owners who didn’t want their names used were worried about losing the industrial potential of the project area and felt homes and hotels should be built elsewhere.

“This is the only true industrial area,” one shop owner said.

Others liked the potential for more jobs in the area, favored the plan for community recreation space and said that more people and traffic through the area can only help nearby businesses. But several people at the nearby Veterans of Foreign Wars post were skeptical the plan will come to fruition.

“They’ve been talking about this for 20 years,” said Marty Hill. “Twenty years ago, this was supposed to be the walking village.”

Leona Anderson said she can’t see it happening, and hopes she is proved wrong.

“When I first got here 35 years ago, they said it was going to be solid hotels from here north,” she said.

In order for the project to go ahead in its proposed shape, QLT will need to seek a zoning change from agricultural to urban for 15 acres and a county special management area use permit, among other clearances.

The hotel would offer limited service in the sense that it wouldn’t have a full scale restaurant and room service, Crabbe said. Instead, “hotel guests patronize the businesses around the hotel rather than in the hotel,” she said.

An ongoing market study will help determine how the mix of commercial, retail, and office uses will be configured. The trust would like to create a village that would attract local customers and be a local gathering place, Crabbe said.

“That would be the draw for visitors — being where the locals are,” she said.

Under the plan, Kuakini Highway would jog eastward on Loloku Street past the current BMW of Hawaii dealership before turning north and continuing in that direction makai of Target and Kona Commons. Kuakini would eventually extend north through QLT land before meeting up with Queen Kaahumanu Highway at some point before Kealakehe Parkway, Crabbe said.

A new road would run mauka to makai on the northern end of the project, connecting to north-south extensions of Maa Way and Pawai Drive and offering a third access point to the park. Two other access roads to Kailua Park would run makai from Pawai Drive.

Specifics on funding sources and costs are still being worked out, Crabbe said. The profits from the development would go to charitable causes in line with the trust’s mission to aid orphaned and destitute Native Hawaiian children, Crabbe said.

“The project is an opportunity to grow our revenue and asset base to benefit children,” she said.

The land is part of the 3,400-acre ahupuaa of Keahuolu. The trust also owns the Kona Industrial Park and five shopping centers in the area — part of its 700 acres of Kailua-Kona property.

The Makalapua Project District is designated industrial and urban expansion under the Hawaii County’s General Plan land use classifications. Most of the land is designated urban by the state Land Use Commission, with 15 acres under the agricultural designation. Under current county zoning, the land is a mix of general industrial, industrial-commercial mixed and agricultural.

The Kona Community Development Plan identifies the project area as a regional commercial center.

Comprised mainly of vacant land, the area is also home to a former recreation facility on Makala Boulevard, the BMW dealership, a temporary storage and staging area on Loloku and light industrial warehouses on Kaiwi Street.

Although the Queen Liliuokalani Children’s Center is outside of the current project area, the trust has been working for a couple of years on plans to build a new facility. The center is one of the oldest operated by the trust, and possible alternate sites are being studied, Crabbe said.

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