Easy-going Kaua‘i is often overlooked as a contender in Hawai‘i’s building industry. But construction on the island is pumping in 2024, second only to O‘ahu this year according to a recent report. Kaua‘i’s construction sector has also added 100 new jobs.
The state’s Department of Business, Economic Development & Tourism (DBEDT) says the value of private building permits in Honolulu increased by 62 percent, to $231.2 million, in the first quarter. The increase was $9.9 million on Kaua‘i, an increase of 29.2 percent. In all other counties, the value of permits issued decreased when compared to the same quarter last year.
DBEDT also notes Kaua‘i visitor arrivals rose during the first quarter of 2024.
Kent Amshoff
HOSPITALITY LEADS THE WAY
“Kaua‘i’s hotel market has been outperforming the rest of the state over the last couple of years,” says F. Kevin Aucello, principal at hospitality consultancy Powell & Aucello.
With the opening of 1 Hotel Hanalei Bay in 2023, Kaua‘i “added 252 rooms, yielding the highest rates in the market,” he adds.
Luxury travelers flock to these high-end properties, spurring development of new projects on the island, such as the redevelopment of the historic Coco Palms Resort by Reef Capital Partners.
The new Coco Palms will fall under Intercontinental Hospitality Group’s Kimpton luxury boutique brand, with the “higher-yielding rooms … pushing up the island’s average daily rate,” says Aucello.
“After 30 years of neglect, we’re truly honored to be the current
stewards of this property,” says Jon Day, Reef Capital Partners chief financial officer. “Since becoming owners two years ago, we’ve always believed Coco Palms should be carefully and sensitively restored to perpetuate the history and cultural value of this special location.”
Demolition at the Coco Palms site is underway by Layton Construction Co. LLC.
“Major hazardous material abatement began and was completed in February 2024, [and] mass demolition of the existing concrete structures commenced in March 2024,” says Kent Amshoff, Layton senior project manager. “A total of 20 buildings are being demolished down to the slab-on-grade and foundation, while four buildings will be [retained and] structurally retrofitted in place.
“Three floors and the roof at the Shell and Ali‘i Kai 1 and 2 buildings have been completed to date, totaling 234,000 square feet of 8-inch concrete slabs demolished. 25,600 square feet of elevated concrete slabs will be demolished at the lobby and the Flame/Lagoon buildings,” he adds.
Layton is completely recycling all demolished deck concrete as crushed concrete gravel and recycled rebar scrap metal.
Mass demolition is expected to finish by the end of July 2024. “We are proud to share that despite the highly complicated nature of this demolition work, we have experienced no accidents, injuries or incidents,” Amshoff reports.
LUXURY BUILDS ON THE RISE
Kaua‘i luxury hotel visitors are also part of the market for the island’s elite residential properties, says Gary Pinkston, principal owner and president of Meridian Pacific Ltd.
“Financial markets rebounded in 2023, which fueled a significant expansion of the global high-net-worth population,” says Pinkston, whose company develops luxury residential and commercial projects in Hawai‘i, California, Nevada and Texas. “This [has] contributed to the increased development and sales in Kaua‘i’s luxury real estate market.”
Since 2021, Meridian Pacific has developed four major Hawai‘i island commercial, residential and mixed-use commercial/residential properties with a combined value of approximately $300 million.
Currently underway on Kaua‘i is Kauanoe o Kōloa, a 25-acre resort condominium project in Kōloa, with Meridian Pacific serving as both developer and general contractor.
The company broke ground this year and is now beginning vertical construction of 280 two-, three- and four-bedroom luxury residences. The $313 million project also includes two swimming pools, a clubhouse and fitness center, and will cover more than 1 million square feet when finished in 2028.
Meridian also expects to break ground in 2025 on two projects in Kukui‘ula, a luxury residential enclave on Kaua‘i’s south shore.
Kaupili at Kukui‘ula, slated to begin work in January 2025, is valued at $60 million and will build 12 luxury homes on 5.22 acres. It’s scheduled to wrap in June 2027. Kilolani Cottages at Kukui‘ula will start in April 2025, with 46 luxury homes valued at $207 million built on 15.64 acres by June 2028.
AFFORDABLE OPTIONS
As the sale price of Kaua‘i’s market-rate homes topped $1 million last year, the County of Kaua‘i continues its efforts to provide more affordable housing to local residents.
The county’s lineup of affordable residential projects in 2024-2025 includes four Lima Ola projects currently underway, with two more slated to begin in 2025.
Unlimited Construction is currently wrapping up work on Lima Ola Lot 2 Senior Housing and Lot 45 Multi-Family Housing, with a combined value of $32.3 million and a combined total area of more than six acres.
The ‘Ele‘ele project includes 40 senior affordable units, 45 multi-family affordable units, a central laundry room, community space and management office, and expects to welcome its first residents in September, according to Unlimited Construction President Jason Thon.
In addition, Kealaula II at Lima Ola is valued at $4.2 million and slated to wrap in August, and Lima Ola Phase I Single-Family Housing broke ground on the first eight of its 38 units in May, with that project valued at $17 million.
Lima Ola Subdivision Phases II and III, valued at $11.5 million, is expected to start in March. The Lima Ola Community Center, valued at $4.5 million, is also slated to begin work early next year.
Kaua‘i County is also lending its support to three affordable housing developments now their early stages: Rice Street Apartments in Līhu‘e, slated to start in November and valued at $38 million; Līhu‘e’s Uahi Ridge Phase I, slated to start in September and valued at $67 million; and Kai Olina Phases I and II in Port Allen, already underway and valued at $46 million.
Unlimited Construction also began building Koloa Makai Workforce Housing, a $20 million neighborhood featuring 12 single-family homes, two duplexes and six additional rental units in July, with an expected wrap in December 2025.
The Department of Hawaiian Home Lands is also active on Kaua‘i this year, with Hawaiian Dredging Construction Company Inc. expecting to receive a notice to proceed on site and infrastructure improvements for the second phase of Hanapepe Residences in August.
PHOTO COURTESY HAWAIIAN DREDGING CONSTRUCTION COMPANY INC.
PHOTO COURTESY KAUA‘I DEPARTMENT OF WATER
INFRASTRUCTURE
IMPROVEMENTS CONTINUE
Water abounds on the Garden Isle and Kaua‘i’s Department of Water (DOW) has three 2024 projects aimed at better regulating its use.
“The Kalaheo Water System Improvements project consists of the construction of one 0.5-million-gallon storage tank, one 0.1-million-gallon storage tank and approximately 11,500 linear feet of ductile iron pipeline (12-inch, 8-inch and 6-inch), water meter service connections, fire protection facilities and appurtenances, along with restoration and repaving work,” says Scott Suga, DOW project management officer.
Hawaiian Dredging is GC on the $21,756,430 project, which broke ground in May last year.
“The project improvements are required to address the existing aged and undersized storage tanks and pipelines which are nearing the end of their life,” Suga says. “The project’s replacement storage tanks and pipeline size have been designed to accommodate the domestic and fire protection needs of the area to meet current standards.” The project is expected to wrap in September 2025.
Hawaiian Dredging is also the general contractor at the DOW’s Kapa‘a Homesteads Package B project and is awaiting a contract for pump and control work at Kapa‘a Homesteads Well No. 4. Notices to proceed for the two projects are expected on Sept. 1 and Oct.1, respectively.
PROJECTS ON THE HORIZON
The County of Kaua‘i has a $96.7 million capital improvement budget for Fiscal Year 2025, up from $87 million the last fiscal year. Notable projects on the horizon include repairing and renovating Vidinha Stadium and the Bryan J. Baptiste Sports Complex, an equestrian center in Līhu‘e, a sports complex for the Kaua‘i Police Activities League and repairs and improvements to various roads and bridges islandwide.
“Kaua‘i’s construction market continues to provide stability with the local workforce operating at capacity,” says Unlimited’s Thon. “There are several active projects and many more planned for 2025 in various sectors providing quality projects across the spectrum.
“We anticipate Kaua‘i’s building industry to remain strong through 2025. There is also talk of some major infrastructure projects that would lead to more housing, mixed-use, industrial and commercial opportunities in Līhu‘e and beyond in the years ahead.”
HPM Enhances Kaua‘i
Operations to Meet Growing Construction Needs
As Kaua‘i’s construction industry continues to see surging demand for HPM’s diverse range of building products and services, Bill Brooks, the company‘s regional manager for the island, notes customer demand indicates a growing preference for high-quality, durable building materials.
“The most in-demand HPM building products and services on Kaua‘i include trusses, Andersen Windows and custom metal roofing standing seam profiles, reflecting the island’s robust construction activity,” Brooks says. “There has also been a significant increase in demand for drywall and insulation … which allows customers quicker access to essential materials.
“Service Aluminum windows have also become particularly popular for home projects in Kukui‘ula, highlighting a trend towards high-quality, durable building materials that offer long-term value and reliability.”
Brooks says HPM will soon manufacture wall panels that streamline construction processes, reduce costs and enhance energy efficiency. In 2025, durable Fiberon composite decking will be added to HPM’s Kaua‘i product mix.
“By the end of the year,” Brooks says, “the Lawa‘i lumber warehouse renovation will be completed, featuring new lumber and pallet racking to improve order efficiency and reduce congestion, making it easier for customers to get the materials they need more quickly.”
