STAR-BULLETIN / 1974
Kuilima Resort & Country Club, now the Turtle Bay Resort, opened in 1972 in Kahuku. Its planned expansion has raised concerns among area residents.
Resort expansion will ruin N. Shore
NORTH SHORE residents are feeling pretty out-gunned, out-spent and out-maneuvered these days in the battle to halt the huge expansion of Turtle Bay Resort. We don't have money to pay for city hall and state Capitol lobbyists, PR men, planners and the like. The "Developer's Golden Rule" -- the one with the gold rules -- is ruling supreme.
The banner "Keep Kahuku Country -- Malama Kahuku" greets drivers along Kamehameha Highway. It is a simple phrase, but it is loaded with history and sentiments of the good people in Kahuku. They want to maintain their rural lifestyle, among other serious concerns. This battle between ºDavid -- local residents -- against the Goliath of rich developers regularly plays out all over our islands.
ABOUT THE AUTHOR
Choon James, a real estate broker for more than 20 years, is a resident of Laie. She has served in numerous civic positions and is a member of several North Shore community groups. A further description of her community activities appears at the end of her commentary.
Catch-phrases like "viable growth," "employment for our local people," "working close to home," "affordable housing," "kamaaina rural style," "a sense of place," "we want to listen to you folks," "we care about you folks" and "we value your input," are thrown at us all the time. It's an art that many developers have mastered to distinction. Just because they throw these phrases at us, we are not supposed to question the motive at the heart of every big development -- mega-profits for the developers. The communities are supposed to be happy about it after a few carrot sticks are thrown their way.
To simplify these conflicting motives, think of Hawaii as an ocean liner. How many people can one put into this ocean liner before its capacity is considered full? How many people can this ocean liner hold before the dynamics on board are altered? These questions must be guidelines in deliberations about viable growth, lifestyle and Hawaii's dependence on tourism.
TO MANY, the North Shore is the last bastion of what rural Oahu is all about. Already tourists are skipping Oahu and going to the outer islands or emerging Third World tourist destinations because Oahu is seen as too urbanized and crowded. Residents feel Turtle Bay's plan for five more hotels with 3,500 rooms is like dropping Kaanapali (Maui) on us.
I think Kaanapali is nice. In fact, Kaanapali is very nice -- a very nice place for wealthy tourists. The question is whether our North Shore is gradually being turned into a playground for the rich. What really are the benefits to the community if such a development would take place on our rural North Shore?
Kahuku has been Campbell land for a long time. The Estate of James Campbell is about to be dissolved in accordance with his will and testament. A brand-new company has been formed to help the Campbell heirs address the business obligations and assets bequeathed to them. In response to this inevitable break-up, the Campbell Estate has been selling its land holdings all around the island. I shall focus only in the Kahuku area.
Kahuku area residents are worried about the planned Turtle Bay Resort expansion. In January, residents showed their fervor for keeping the North Shore rural by protesting what they fear will be the development of homes for the wealthy where plantation-era homes now stand.
Thousands of Campbell agricultural acres are being sold to private developers who have big dreams. The municipal golf course's lease with Campbell Estate expires at the end of this year; a developer was eyeing this. The plantation homes are in danger of being razed for new development. Malaekahana, a subdistrict of Kahuku, has been purchased and there is a proposal for a planned community.
IN THE 1970s, the community of Kahuku was suffering from the closing of the Kahuku Sugar Mill that started gradually in the 1960s and was finalized in 1971. A group of displaced workers needed alternate employment.
When the existing Kahuku hotel wanted to further develop, it was seen by many as a good idea. This was, in part, due to the many entry-level jobs that supposedly would become available. It was anticipated that Kahuku Sugar Mill workers could be absorbed into the service side of the hotel industry. The developer then also had ideas of turning our island into a golf-course heaven for its Japanese clientele. A unilateral agreement was crafted and recorded in which large areas of green space were protected along with community benefits that included a child-care center, North Shore career training center, affordable housing and so forth.
However, the plans for the hotels were put on hold and then stopped, due to the Japanese economic downturn in the 1980s and early 1990s. Asahi Jukyen sold the hotel interests but hung on to the land lease under both of the Kuilima Estates condominium complexes.
THE PHYSICAL structure of the hotel was in bad shape. Because of its location by the ocean, the deterioration was inevitable and obvious. The hotel was losing money, and occupancy was a struggle.
Years later, Turtle Bay became a perfect buy for a company like Los Angeles-based Oaktree Capital Management. Oaktree is a capital private investment firm with an opportunistic philosophy. It looks for distressed properties that have the potential to appreciate in time or with some infusion of upfront capital.
In other words, Oaktree looks out for ugly ducklings and turns them into swans to make money. Oaktree acquired a $170 million interest in Liberty House during its long bankruptcy proceedings. In 2001 it sold its interest to Macy's for $200 million. It also acquired the Waikiki Landmark Luxury Condominium complex in 1995 at a very depressed purchase price. It turned around and sold the condos a few years later earning tens of millions of dollars in profits.
Based on this brief history, here is my opinion of the proposed 3,500-room hotels that Oaktree wants to revive:
Twenty years ago, the conditional permits for the proposed expansion were approved. But much has changed in 20 years. Reason and the public good alone should prevent Oaktree from thinking it is entitled to proceed with this development plan without answering to the surrounding communities.
I recently obtained a manini building permit to erect a small rock wall on one of our properties. The building permit specifically stated "This permit may be revoked if work is not started within 180 days of issuance or if work is suspended or abandoned for 120 days." We are just talking about a little, insignificant wall. Imagine, those permits given to the hotel have lain idle for 20 years! Surely the permits to build those hotels have got to be standing on shaky ground by now.
GIVEN ITS investment history, it seems logical that Oaktree could make much more money if the sale of its hotel portfolio includes ready, workable permits for major developments like the five hotels. Another consideration is the trend to convert hotels rooms into individual condominium units for sale. This has happened in Honolulu; it could happen in Kahuku as well. The Kahuku hotel has a history of low occupancy, so there are unanswered questions as to why more hotels should be built now.
In addition to the hotel proposal, other developers have set their eyes on the Kahuku area, including Malaekahana. For example, a venture group already is soliciting capital to invest in a 58-acre agricultural lot in Kahuku. They are optimistic that the agricultural-zoned land can be rezoned into 120 housing lots and more. This scenario is repeated in various acreage in Kahuku. If every developer gets what it wants, Kahuku could have a prairie fire of development over all its agricultural lands.
Is this viable for Kahuku, the North Shore and the island? What about the traffic? What about schools? What about the economic, social and cultural effects? What does this spell for the common folks in the communities? There are a thousand unanswered questions.
FOR NOW, it is imperative that there be a rigorous re-examination of the 20-year-old Turtle Bay Resort expansion permits due to the passage of time and changed conditions of the North Shore and the island of Oahu. Residents are concerned about public safety and social and economic effects on our communities. We have many more questions than answers regarding this resort expansion. The Senate and the House are asking for a rigorous re-examination. We additionally call on Mayor Hannemann and the Honolulu City Council to listen to the voice of the people. This is the least they can do. The Developer's Golden Rule must not oppress the voices of the people.
Choon James served in numerous civic positions, including the North Shore/Kuilima Strategic Planning Committee, Kuilima Resort Shopping Center Design chairwoman, Affordable Housing Committees, president of the Laie Point Community Association, Laie Community Association board member, Kahuku Hospital board member and president of the Brigham Young University-Hawaii Alumni Association.