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Kauai Newsletter
(current edition)
Spring/Summer 2007
Aloha from the Garden Island!
First, A Bit of History
Until
recently, change has come slowly to this little green dot
in the middle of the Pacific. Just a couple of generations
ago when the rest of America was at the height of the
suburban era of tract homes and station wagons, local
resident Mike Villanuevo remembers riding the school bus
for two hours every morning on a winding, bumpy road
to take him from his home in Hanalei to Kapaa High. At the
end of the school day, it was another two hours back. His
father made a dollar a day. There was no TV or radio at
home. Entertainment was provided by the movie theater in
Kilauea, where patrons carried umbrellas or wore raincoats
because the roof leaked. But there was other, island-made
fun: fishing, swimming, surfing. And the universal joy of
biting into a 5-cent popsicle.
By the
mid 1970s the sugar plantations were closing up, the
result of less expensive labor elsewhere and the
increasing use of corn syrup and other sweeteners in
manufactured food. Tourism became the mainstay of the
economy, as mainlanders began to discover the island's
astonishing beauty. Some of them, then more of them,
decided to call the island home. Hotels and golf courses,
shopping centers and coffee houses, luxury homes and
condos sprang up on former plantation land.
Now the
island stands at a crossroads. Though some pine for a
return to an agrarian lifestyle, few would want to bring
the plantations back, and even small farms are difficult
to sustain. But old-timers and new residents alike place a
premium on the relaxed atmosphere and sense of community
that derive from the island's rural past. Is it possible
to maintain that tranquility in the face of a growing
population of residents and visitors? If growth were shut
off or curtailed, what would happen to the economy? And
what about affordability?
This is
the background behind all of the island's current news and
debates. Taking center stage this spring and summer are
the issues of "big box" stores and vacation rentals.
How Big A Box?
Before
the county council is a bill that, if passed, would limit
the size of retail or wholesale establishments to 75,000
square feet. Wal-Mart, Kmart and Costco already exceed
that size. Now Wal-Mart wants to become a Supercenter
store and sell discounted groceries as well as its other
goods, adding another 66,000 square feet to the size of
its box. That's too much for some residents, who worry
about increased traffic and local stores' ability to
compete. Others point to the need for affordable groceries
on an island where many work two or three jobs to stay
afloat. More than 150 people showed up to testify at a
recent public hearing on the subject. After mulling over
their comments, the council will take a vote. Stay tuned
for the results.
Vacation Rental Issues
Another
bill the council has drafted but has postponed voting on
concerns vacation rentals. Some residents think there are
too many of them, eroding the sense of community and
creating a loud, party atmosphere in residential
neighborhoods. Other residents depend on the income from
their rented homes or bed-and-breakfasts to survive. They
say that noisy residents can be just as much of a problem
as visitors.
As the
law stands now, anyone can rent their property, but owners
are supposed to pay two different state taxes on the
income they receive. There is no registration system, and
many do not pay the taxes. The new measure the county has
drafted would allow unlimited vacation rentals in areas
designated as "visitor destination areas" by the county's
master plan (which many feel is out of date), but would
allow no new vacation rentals outside these areas. The
visitor destination areas consist mainly of Princeville,
Poipu, and a small part of Kapaa. Existing vacation rental
properties outside the visitor destination areas would be
grandfathered in only if they have a record of paying
their taxes. This, too, is sure to be a controversial
vote. Hanalei, Haena, and Anini Beach, all prime beach
areas full of vacation rentals, are NOT in the county
master plan's visitor destination area. Many of the
property owners who do rentals in these areas have not
been paying the state taxes, and thus their operations
would become illegal if the new law is passed. And if it
is, another important question is whether the county will
have the manpower or the will to enforce it.
Traffic Woes and Dreaming of Solutions
As a
first baby step in alleviating Kapaa traffic jams, a new
road has been opened extending the Kapaa bypass to the
north. It's a mile-long route along an old cane hauling
road in the hills above the highway. The new road opened
in January. It is only for southbound traffic, and so far
it seems to have made little dent in the congestion
heading to and through Kapaa.
The
county has much more ambitious plans for traffic solutions
in the future, but does not yet have the funds to pay for
them. In the meantime, approval has been given to several
new resort developments that will make the need for
alternate routes even more urgent.
A new
project the county does have funding for is adding a lane
for the bridge over the Wailua River so that there will be
two lanes northbound and two lanes southbound, plus a
bicycle path. Also in the works is another lane of Kuhio
Highway that will run from the Coco Palms resort to the
southern end of the current bypass. The cost of these two
projects is expected to be $20 million, and the work will
be bid in November. Estimated completion time is 12 to 18
months.
But the
long-range plans are far more grand and, as yet, unfunded.
The county would like to build a permanent bypass road
(the current one, even with the extension, has always been
considered temporary) that would run roughly parallel to
the current highway, but farther inland. The cost of this
project is estimated to be $250 million. Kauai pays for
transportation projects through matching state and federal
funds. The entire state receives about $130 million in
funds each year, and only a small percentage goes to
Kauai. The county hopes to develop the permanent bypass in
the next 15 years. Another long term traffic project
involves creating a four-lane highway between Rice Street
in Lihue and Maluhia Road leading to Poipu ($160 to $180
million.) Altogether the county has plans for $500 million
in road expansion and traffic improvement, not including
the $250 million it hopes to spend for the permanent
bypass. Even with developers increasingly paying large
sums to build roads as a condition of obtaining their
permits, these projects appear to be a long way away from
reality. In the meantime, just as in the mainland, we sit
for increasingly long periods in our cars. But at least
the scenery is beautiful here.
Bird Aid
One
government program that does work is literally for the
birds -- the Save Our Shearwater program (SOS) saved 400
birds in 2006. Newell's shearwaters come to Kauai to breed
in October through December, then the chicks fledge. But
they sometimes get disoriented by lights and fall to the
ground, often injured. As a result the county set up
shearwater collection boxes throughout the island at fire
stations. Stunned birds are released and injured birds are
treated at the Kauai Humane Society until they are ready
for flight. Now other birds, including tropic birds and
boobies, are also being deposited in the boxes, and cruise
ships are also bringing birds in. As a result many of the
boxes will be open for deposit year-round. If you find a
bird, you should deposit it at one of the fire station
boxes and be sure to call the number listed by the box to
arrange for a pick-up. Even though many birds are being
saved by good Samaritans, others face predators like dogs
and pigs while still in their cliffside nests, so they
need all the help they can get.
Time for the Superferry
Ready or
not, here it comes -- the controversial Superferry begins
sailing in July. The 900-passenger, 250-car vessel
survived legal challenges from environmentalists and sea
trials in the Gulf of Mexico and will be plying the
Hawaiian waters soon. The ferry offers islanders an
opportunity to shop in Honolulu for bulky items that would
be difficult to transport by plane, and offers tourists a
different way of seeing the islands. Though some are
concerned about increased traffic, this may not be the
case, as tourists arriving by planeload all rent cars
anyway, and residents must drive to and from the airport
to get off the island. Fare will be $42 per person or $55
per vehicle one way to Oahu. Eventually service between
Oahu and Maui and Oahu and the Big Island will be added.
What About the Bike Path?
In the
slow lane, development of Kauai's bike path has stalled
while the county deals with controversy over six rest
pavilions that were built along it in inadvertent
violation of the county's 40-foot shoreline setback rule.
The wide concrete path will be the first of its kind in
the state, cutting a swath from Niumalu, though Kapaa and
up to Kealia. Walkers, joggers, and bicyclists are already
enjoying the phases that have been built. The path is also
open for equestrian use, though that, too, is
controversial. As drivers passing along the highway notice
the path being used without incident, perhaps the
controversy will die down. Whether the pavilions stay or
have to be moved is a real question, but there appears to
be plenty of room, as well as plenty of use, on the
existing path.
The Green Island
Though
Big Sugar will likely never be the powerhouse it was in
the plantation days, what's left of the industry may be
sustained by a new product: ethanol. Some experts say that
ethanol production using sugar cane is much more efficient
than that using corn. Now a Kauai company is applying for
a permit to do just that. If it obtains an air emission
permit, Kauai Ethanol will be the state's first ethanol
plant, producing 12 million gallons of ethanol a year. We
have to get it from somewhere. Last year the state passed
a law that requires gasoline sold in Hawaii to contain at
least 10 percent ethanol. Currently the ethanol is being
imported from El Salvador, among other places. The new
plant, if approved, would satisfy 30 percent of the
island's demand for ethanol. Four other companies would
like to establish plants if this one gets approved.
Construction could start as early as next January.
Also
doing its part toward energy conservation is the Sheraton
hotel in Poipu, which plans to install two generators
that will power most of the resort on energy-saving diesel
fuel starting next year. The generators are expected to
provide the Starwood-owned resort with significant
savings. The generators, made by BluePoint Energy in
California, will produce both heat and air conditioning.
If the system works well, look for other hotels to follow
suit.
Facelift for the Princeville Shopping Center
Visitors
to the Princeville Shopping Center are seeing some new
colors and hearing pounding and hammering as the new
owners upgrade the retail facility. Princeville last year
spun off ownership of the center to the Honu Group, a
longtime developer of shopping centers and malls including
very high-end retail centers in Honolulu. The new owners
are revamping the 30-year-old center, replacing old,
termite-ridden wood, re-doing decks and walkways,
repainting structures in mint and plantation green, and
improving common area coverage to protect it from sun and
water. New signage, landscaping, murals and sculpture by
Kauai artists will also be added. The new owners raised
rents considerably, but few tenants have left the center,
which has an unbeatable location near the thousands of
homes and condos in Princeville. Also new at the center is
a pharmacy recently added to Foodland. In addition, the
Chevron gas station at the center is constructing yet
another pharmacy. We have needed a pharmacy in the area
for a long time ... but two? Just like the north shore
weather, evidently when it rains, it pours.
Filming
will commence here this summer on a Ben Stiller-directed
war movie tentatively titled "Tropic Thunder," starring
Robert Downey Jr. and Jack Black. Also coming to the
island to film this summer are a Japanese company filming
a television special and another Japanese company filming
a commercial. An ad for an American TV program will also
be shot here this summer, and possible future projects
include a film based on surfer Bethany Hamilton, who lost
her arm to a shark two years ago and still surfs
competitively. The island's revenue from film production
was $1.64 million in 2006, a 46 percent increase over the
previous year. Kauai's dramatic scenery continues to
attract commercial producers as well as Hollywood, despite
the production costs of bringing people and equipment to
the island.
Before
your next trip to the beach, be sure to check out a new
website,
www.kauaiexplorer.com. The site, developed by Hanalei
marketing company Wasabi Marketing Elements, offers
descriptions of Kauai's beaches with photos and maps. This
is very helpful, since on the island, beaches are
unmarked. It tells you which beaches have lifeguards,
which are family-friendly, and which are good for learning
to surf. It contains daily tide charts and has a video on
beach safety, as well as news about surfing and ocean
activities. Stay safe and have fun!
Real Estate
Our once
red-hot market has changed. Sales are generally down, and
in many areas prices have finally come down too, turning
the market from a strong seller's market to more of a
buyer's market. Higher interest rates (though they keep
coming back down) and a market correction on the mainland
coasts are driving the market here.
March
MLS statistics show a drop in number of sales island-wide,
from 6 percent for homes to 66 percent for condos, and 82
percent for land. However, things are still perking along
in the Koloa district, which includes the popular winter
resort area of Poipu. There, home sales were up 60
percent, and condo sales up 50 percent over those of March
2006. Land sales were up 33 percent.
On
the north shore, the island's other resort destination,
home sales were down 44 percent and condo sales down 7
percent, though land sales were up 33 percent. But home
sale prices were still up a whopping 71 percent over those
of March 2006. The Poipu area shows what's needed for more
sales: in that region, home prices were 30 percent lower
than those of March of 2006. Many sellers are finally
starting to lower their asking prices on the north shore,
and others are more willing to negotiate on price. Condo
prices, too, were up on the north shore, nearly 73 percent
higher than last year's, whereas the Poipu area's were
down 5 percent. But with the new high-end Kauilani
development being built in Princeville, don't look for
condo prices to drop overall, as those sales are bound to
raise the average. Nevertheless, the excess inventory in
existing complexes is putting pressure on prices on north
shore condos as a whole.
Median sales prices
on the north shore now stand at $1,787,500 for a home,
$900,000 for a condo, and $919,000 for vacant land.
On the south shore,
which includes the residential communities of Kalaheo,
Lawai, and Eleele as well as Poipu, median price for a
home is now $669,500. For a condo it's $675,000, and for
vacant land, of which there is very little left available,
$805,000
Finally, a New Beachfront Project
For a
complete list of all the new projects being developed on
Kauai, please see my last newsletter, which is posted on
my website,
www.SilverPalmProperties.com.
In
addition, another project is coming along that has what
everyone wants and rarely finds on Kauai: sandy
beachfront. Koloa Landing will be built next to the
Sheraton in Poipu, the first development of its kind in 20
years. The 25-acre property will contain 323 condos, most
with ocean views and all with elevators (a rarity on
Kauai) and covered parking. The project will include a
pool, fitness center, and full-service spa. Management
services will be available to handle rentals. Prices have
not yet been set, but will probably start at around
$850,000. Reservations will be available soon for the
first 129 units. Please contact me if you would like to be
on the list or get more information.
That's all
for now. It's sunny and
gorgeous here, and I hope to see you back on island soon.
With warmest aloha,
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