Kauai Newsletter
Winter 2005

Aloha from the Garden Isle!

The new year blew in with a wallop on our usually tranquil island, with several days of very unusual thunderstorms, and heavy rains and flooding throughout the island. Bridges were closed, sinkholes swallowed a couple of cars, and landslides sent boulders tumbling to the road. Here on the North Shore we had waves as high as 50 feet! It was all very dramatic, but the weather gods seem to have sorted things out, and we’ve now returned to our typical winter weather pattern, with days of stunning clarity followed by periods of nourishing rain, and temperatures in the high 70s. I understand that weather patterns on the mainland have been spirited too, with blizzards in the Northeast and Midwest, weeks of rain in California, and unseasonably warm or dry spells elsewhere. Perhaps the tsunami caused the disruptions? If so, we can be thankful that all we’ve experienced are minor inconveniences, and be grateful that Hawaii has an elaborate tsunami warning system, which is currently being updated.


New Owner For Princeville

The exciting news on the North Shore is that it’s official – the sale of Princeville from three Japanese companies to an American developer went through in January. For about $200 million, Hawaii developer Jeff Stone acquired some 9,000 acres, including the 252-room Princeville Hotel, two golf courses, a spa, and a shopping center. The acreage extends far beyond the fountain entrance to what we normally think of as Princeville, including thousands of acres on either side of the highway headed toward Kilauea. Some financial people think Mr. Stone got a real bargain.

What does this sale mean for the North Shore and for the island? Mr. Stone says he has a strategy of “controlled growth,” and plans initially to spend a few million dollars on employee housing, then expand the shopping center. After that, he may bring in a couple of “name brand” hotels. Beyond that, we don’t yet know, but there are very few parcels in the 9,000 acres that are zoned for development at this time. Most of the land is former sugar, coffee, or pineapple plantation property, still zoned agricultural and without any infrastructure. Developing it would require years of hearings, government approval, and preparation. So what we can expect to see is the completion of development in the part of Princeville that we are all familiar with.

We’re getting pretty close to that already. The last two parcels of land zoned for condos, adjacent plots along Pepelani Loop, were recently purchased by developers. One new condo project, the Plantation, is underway, and another will be breaking ground soon. Starwood will be building a luxury timeshare resort at the end of Wyllie Road, selling a week’s shares for more than $50,000 apiece. All over Princeville, owners are starting to build on their privately-owned lots. Employment is up, the building industry is thriving, and the quality of construction generally far exceeds that of the ‘70s and ‘80s, when the majority of homes, condos, and timeshares were built. Industry analysts have considered Princeville an underperforming asset for years. Now that may change. Mr. Stone’s track record includes turning around the once fading, now thriving Ko Olina resort in Oahu, generating 2,000 new jobs and over $1 billion in investments. He expects similar benefits for Princeville.

One property that won't require much assistance is the Princeville Hotel itself, which recently made the Conde Nast Traveler magazine's Gold List, a list of the best hotels selected by the magazine's 20,000 readers. Also on the list are the Lodge at Koele and the Manele Bay Hotel, both on Lanai.


Healthy Reefs and Better Parks

Good news for North Shore reefs: After collecting and analyzing thousands of pieces of data along Princeville's coast, University of Hawaii scientists working on a research grant from the National Oceanic and Atmospheric Administration have determined that the amount of coral has increased and is healthy in every area they studied. The scientists speculate that continuous flushing by ocean waves may be keeping the coral in good shape, despite potential dangers from high waves and storms, which can damage it, and from people stepping on the coral, which kills it. It's wonderful that our reefs remain healthy. Let's all remember to be careful not to disturb the coral when fishing or snorkeling so that we can keep them that way. Look, but don't touch!

Campers and hikers will be happy to know that the state Department of Land and Natural Resources has embarked on a multi-year project to repair, replace, or improve rest rooms and other facilities at its 69 state parks on Kauai and throughout the state. "Newer facilities will ensure greater health and safety conditions at state parks for residents and visitors, better maintenance, and ability to handle the increased volume of park users," a Natural Resources spokesman said. The state has allocated $15 million for the project. Kauai has five of the ten most visited parks in the state. Some planned improvements include rest room renovation and road improvement at Kokee State park, rest room renovation at Wailua River State Park, improvements to the viewing platform at Fern Grotto, and placing an onsite park ranger at Haena State park, which will also get portable toilets and better signs.


Retail Goes Mainland

Kukui Grove mall is starting to feel a little more like a mainland shopping area, with residents and visitors alike unfolding newspapers over a latte at the outdoor tables of the new Starbucks, perhaps resting after a trip to the new Home Depot nearby. The mall has also extended its hours and added an athletic shoe store and a Quiznos eatery.

And now, Costo wants to come. The Seattle-based wholesale giant has revealed plans to build a 150,000-square-foot warehouse store and a self-serve discount gas pump facility on the site of what is now a pavilion behind the mall. The store would also include a bakery and delicatessen, a photography center, and an area for tire sales and installation. Whether or not you are a fan of discount shops on the mainland, you might well come to appreciate them on Kauai, where shipping costs make prices much steeper than they are back home. The downside for local business owners is the impact that Costco always has on its competitors, especially small businesses. If the Costco project is approved, it is likely to generate not only 200 jobs, but further retail and housing development in the surrounding Lihue area, where already a golf course and a residential community surrounding it are expanding.

All these changes in and around the mall have occurred under ex-AOL chief Steve Case, who bought Grove Farm, the company that owns the mall in 2001. Case has now put the mall up for sale. Any interested buyers, please give me a call. ;-)


Real Estate News

It will come as no surprise to you who have bought, sold, or looked at property here over the past year that real estate values have risen at an impressive rate of appreciation. The median price for a single family home on Kauai rose 35 percent, to $495,000, which was the greatest rate of appreciation in the Neighbor Islands. (Figures were 25 percent for the Big Island and for Maui.) Median condo prices for the year were up 31 percent on Kauai (28 percent for Maui and 50 percent for the Big Island.)

Currently, the market is very strong, with properties selling quickly and a low supply of inventory. This is particularly true of land, as the remaining vacant parcels in the resort areas of Princeville and Poipu get built up. More mainland buyers are moving into the Wailua area, in the hills above Kapaa, if they can't find what they want at the right price in Princeville. On the South Shore, with very limited inventory in Poipu, buyers are increasingly moving into the surrounding areas of Lawai, Omao, and Kalaheo. All these areas offer acreage, often with stunning mountain or even ocean view, at prices well below those nearer the resorts.

That’s all for now. Please feel free to e-mail me with real estate questions, and remember, the week before your next visit to the island, you may CALL OR E-MAIL ME and I’ll e-mail you appropriate listings. You can then sift through them and select the most promising so that you don’t waste precious vacation time wandering around open houses or running to last-minute showings. I'll be seeing you!

With warmest aloha,