Opponents of Coco Palms redevelopment hail a court ruling, but it may not stop the rebuilding

WAILUA (HawaiiNewsNow) - The long saga of Coco Palms on Kauai may be heading back to court after a three-judge panel canceled a foreclosure deal that led to the current redevelopment.

The state Intermediate Court of Appeals ruled that the foreclosure involving a previous developer was invalid.

The Utah company spent $400 million to build a new resort on the property and said the latest ruling was no big deal. But opponents beg to differ.

“They vacated it. They vacated the whole thing. So now we start from scratch. It all goes back to ground zero,” said Teresa Tico, an attorney for the group I Ola Wailuanui, in response to the court’s ruling.

I, Ola Wailuanui, want to prevent a new hotel from replacing the one destroyed by Hurricane Iniki in 1992. The group said that after a previous developer—Coco Palms Hui—defaulted on a loan, a Utah company filed a foreclosure on the property, which was granted in 2020.

The court said, however, that the company was not the lender, and only lenders can file a foreclosure action.

“If that decision, foreclosure decision was vacated, the title has to be vacated. And if they don’t have a title, how can they move forward with the construction of the hotel?” asked Tico.

“There are multiple players involved in the property, any disputes, challenges on the property, and ownership and management of the property,” said Mason Chock, vice president of I Ola Wailuanui.

The group RP21 Coco Palms had the title to the property, and Coco Palms Hui defaulted. RP21 was moving ahead with Coco Palms, a Kimpton Resort with 350 rooms.

Jon Day, the chief financial officer of developer Reef Capital Partners, said that the ruling “clarifies the steps needed to resolve an issue with a creditor of the previous owner of Coco Palms.”

“This ruling is entirely unrelated to Reef’s ownership of Coco Palms. While the ruling shifted ownership of Coco Palms from RP21 Coco Palms back to Coco Palms Hui, both of those companies are 100% owned and controlled by Reef Capital Partners. Therefore, the ruling has no impact on Reef’s ability or commitment to restore the historic Coco Palms Hotel in a sustainable and culturally responsible manner. Reef remains on track to welcome the local community and guests to the restored property in late 2026.”

“There are many possible outcomes to this. I mean -- I hope we don’t have to go to court,” said Tico.

Opponents aren’t giving up the fight and still aim to buy the land and turn it into a park.

“We don’t want to wait around another 30 years to have everyone figure this out on the legal front,” said Chock. “We want to be poised as a community to be ready to be a part of what the future of this important place is.”