Friday, July 16, 2004

Sale of Kauai resort
renews growth discussion

Jeff Stone has agreed to buy
the 9,000-acre Princeville Resort


What the resort sale includes:

>> Name: Princeville Resort
>> Size: 9,000 acres
>> Amenities: hotel, health club and spa, shopping center and two golf courses

Garden Isle residents had mixed reactions to the news yesterday that Ko Olina developer Jeff Stone has agreed to buy Princeville Corp.'s 9,000-acre Princeville Resort on Kauai for an undisclosed amount.

Stone, who is most well-known for revving up Ko Olina, turned the struggling Oahu property into a growing resort that has generated nearly 2,000 jobs and yielded $1 billion in investments in the past six months.

Because of Stone's reputation for using Ko Olina to kick-start the economy on Oahu's Leeward Coast, some Kauai residents, such as Kauai Chamber of Commerce President Mamo Cummings, are optimistic that the transaction could benefit Kauai's economy.

"Kauai is doing really well and we are pleased to see some closure on that particular transaction," said Cummings, who is also running for the state House. "This is an opportunity for balanced growth and it might help alleviate our problems with affordable housing on the North Shore."

The acquisition, which includes the 252-room Princeville Hotel, two golf courses, the Princeville Tennis Club and Pro Shop, Princeville Health Club and Spa, Princeville Shopping Center and other land holdings on Kauai's North Shore, is expected to close by the end of the year.

But if the Princeville project's success means rapid growth in the area, other Kauai residents have said that they could do without it, said Beryl Blaich, who has lived in Kilauea since 1979 when the current owner, Princeville Corp., first entered the Kauai market.

"Slow growth is exactly what we like around here," Blaich said, adding residents haven't exactly been disappointed that the underperforming Princeville Resort has made little progress on its master plan, which calls for a school, timeshares and residential housing.

Stone formed Princeville Associates LLC, a joint venture between Honolulu-based Hawaii Land Development Corp. and the Morgan Stanley Real Estate Funds, to buy the resort from Princeville Corp. All 600 resort employees are expected to be offered employment as part of the sale agreement, Stone said.

With the new purchase, Stone expects to make substantial improvements -- build housing units for employees, increase jobs and provide a strong base of work for the construction industry, he said.

"In short, our goal is to play a pivotal role in supporting Kauai's economy," Stone said, adding that the Princeville Resort's undeveloped master plan was an attractive part of the deal. Development of that master plan will be a topic at upcoming community meetings, he said.

Blaich said she hopes that she and other residents who attend the meetings are able to convey to Stone the importance of preserving the rural integrity of Kauai's North Shore.

"I don't have any quarrels with any of the past owners or preconceptions with Mr. Stone, but planning mistakes have already been made and I would truly hate to see them compounded," Blaich said. "Quality development is a matter of taking time and not a land grab."

Kauai residents want development, but they want it to be responsible and respectful, said Barbara Robeson, a former member of the Kauai Planning Commission who has lived in Wainiha for the past 28 years.

"If development occurs, one of the top priorities is ensuring that affordable housing is part of it," Robeson said. "I'd hope the new developer would be mindful of that and of Princeville Resort's other commitments to the community."

Also any kind of development plan needs to address its potential impact on North Shore beaches and parks, she said.

"Traffic and solid waste are already problems," Robeson said. "Any developer who doesn't take those issues into account now will be forced to address them later."

Princeville Resort

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