Nathan W. Smith

Broker (VP)

 

Princeville’s Entrance Brief Historical Background / Potential Costs Written by: Rory Enright, PHCA General Manager

The purpose of this paper is to summarize a complex situation regarding the entrance to Princeville and the neighboring roads. This issue is important for several reasons:

 It potentially impacts all resident’s access to Princeville

 It has resulted in very poor road conditions around the entrance area

 It will cost money to resolve

Understanding the current situation requires some historical background.

Historical Background

Although a large part of the history of the events surrounding Princeville’s entrance is documented in contracts and written communications, there are other aspects that have been gleaned from long-term residents’ memories. So I welcome corrections to any perceived inaccuracies from individuals who have direct knowledge of the events impacting this issue.

In 1987, the Qintex Group of Queensland, Australia, purchased the stock of Princeville Corporation and took it private. From 1989 to 1991, an extensive refurbishment of the hotel and surrounding resort was undertaken. One of the projects included the development of a new entrance with its two ponds and "Neptune’s Fountain" (today’s main entrance). Most of this entrance is located in Parcel 3 which extends from the highway down to the tree line just before Wyllie Road and includes the Emmalani Drive from the fountain to the intersection with Old Ka Haku (refer to the area outlined in red in the attached map). It replaced the original entrance which began where Old Ka Haku Road intersects the highway, continued between the Library and Princeville Center and then extended down the tree line of Prince Albert Park. This last section of road was removed when the new entry was created.

The building of this new entrance was a Princeville Corporation decision. The Princeville at Hanalei Community Association (PHCA) did not have a voice. Princeville Corporation promised that the PHCA would have no construction or ongoing maintenance responsibilities for this addition. Princeville Corporation’s plan was to convey ownership of Parcel 3 to Princeville Phase II (PVII) in January 2003. It was anticipated that PVII would have been completely built out by 2003, with an excess of 2,000 units. Assuming that number of living units in the community, it would not have been difficult for PVII to absorb the cost for maintaining the entrance.

To pay for the ongoing cost of maintaining the entrance, Princeville Corporation established a set of maintenance agreements with the following organizations which it controlled:

Westin SVO (formerly Lot 25)

 St. Regis Hotel (formerly the Prince Hotel)

 Queen Emma’s Bluff Lots (QEB III)

     Ka’iulani Condominiums

 Emmalani Court Condominiums

 Villas on the Prince

 Greens

These groups were allocated a percentage of the costs for the entrance annually. The Westin and St. Regis have historically absorbed most of the cost, contributing approximately 70% of the funds. These funds were allocated to both maintenance costs and road reserve funds. The PHCA has never contributed to the maintenance of the entrance.

The 1990’s was tumultuous for Princeville. The Qintex Group went bankrupt and Princeville Corporation was sold to a Japanese partnership led by Suntory Ltd, in 1990. In September, 1992, Hurricane Iniki hit Kauai and caused extensive damage to Princeville. Consequently, PVII never developed as planned. By the time the date for the turnover arrived (Jan, 2003) PVII didn’t have enough living units to absorb the cost of maintaining the entrance. Princeville Corporation decided to put off the transfer for another 10 years to January, 2013.

In 2005, all the assets of Princeville Corporation were sold by the Japanese owners to a Honolulu based company, The Resort Group (TRG), owned by Jeff Stone. In addition to acquiring the Prince Golf Course and approximately 9,000 acres of the surrounding area, TRG became the legal declarant for PVII, with control ( 2 of the 3 seats) of the PVII Board.

In January, 2013, TRG transferred the ownership of Lot 3 to PVII. Although, the PHCA does not have access to the numerous contracts impacted by the transferal, it is our understanding that both the roads and fixtures were to have been transferred in either prime condition or with adequate reserves to return them to prime condition. To date, neither has occurred.

Additional Issues

Beyond the issue of Lot 3, there are a few additional complicating issues. While the plan has always been to convey Parcel 3 to PVII, there are three additional areas of the entrance outside Parcel 3 still controlled by TRG that present a problem:

 The front two fountains fronting Princeville on the highway

 Old Ka Haku Road which runs between the highway and Emmalani Drive between the library and Princeville Center.

 Ka Haku Road between the "tree line" (extends down the side of the Prince Albert Park) and through the Wylie Road intersection.

The last two road segments are in such poor condition they represent a true safety hazard.

 

Potential Costs

Ultimately, any future solution has to deal with both the costs of immediate repair and ongoing maintenance. The PHCA estimates the cost of the major road repairs to be in excess of $1.2m. The cost of updating/repairing the fixtures in all three fountains (if they are to be retained) is unknown but it has to be substantial given their age. One would have to assume they are at or beyond their useful life. If the fountains are not going to be retained then the cost of conversion to a more cost-effective landscape design has to be accounted for. This could easily cost $100,000 to $250,000.

So it is reasonable to estimate that the upfront costs of bringing Princeville’s Entrance up to par will be in the neighborhood of $1,500,000. After these repairs are made, the ongoing annual maintenance cost is going to range from $200,000 to $300,000.

Princeville Entrance Map

 

 

 

Lot 3 (Upper Ka Haku Entrance) is outlined in . Lot 2 (Old Ka Haku Road) is highlighted in Princeville Phase II encompasses the right side of the map