$431 million financing advances long-delayed Coco Palms redevelopment

The latest financing gives Coco Palms its biggest push in years, but the long-closed Wailua resort still has to clear county conditions that will shape traffic, sewer demand, parking and workforce housing before the project changes daily life on Kaua‘i. X-Caliber said the $431 million package, announced June 22, will support redevelopment of the 32-acre site into a 351-room hotel with restored historic structures and new dining, retail and event space.

The deal is split between $185.6 million in conventional senior-secured financing through X-Caliber Rural Capital affiliate XRL-ALC, LLC, and $245.35 million in Commercial Property Assessed Clean Energy financing through CastleGreen Finance. X-Caliber said the structure provides 80% loan-to-cost financing, a level that suggests the project is now carrying a deeper capital stack than many stalled resort revivals can secure. Highgate is expected to operate the hotel once it opens.

Coco Palms has been tied up for decades. The resort first opened in 1953 and closed after Hurricane Iniki struck on September 11, 1992. It later became one of Kaua‘i’s most visible symbols of deferred redevelopment, even as it remained listed on both the National Register of Historic Places and the Hawaii Register of Historic Places. Reef Capital Partners took ownership in 2022 and said in March 2024 that it planned to invest more than $400 million, reopen the property in 2026 and restore pieces of the original resort, including the Lotus, Flame and Seashell dining venues, along with a cultural center, spa and taro farm.

The money, however, did not erase the project’s local hurdles. The Kaua‘i County Planning Commission approved the annual status report in a 6-1 vote in October 2024, allowing the project to move forward after reviewing 29 permit conditions. At that point, 10 conditions were complete, 12 were ongoing and seven were still forthcoming. The unfinished items included sewer connection, workforce housing, public parking, a traffic impact analysis and shuttle service, all of which carry real consequences for surrounding roads and county infrastructure.

The commission also heard more than 200 pages of testimony, including submissions from Friends of Maha`ulepu and I Ola Wailuanui. One resident raised a possible debris-management violation involving materials near the historic fishpond, underscoring how cultural and environmental concerns remain central to the project’s path. Reef has said it is conducting archaeological and cultural monitoring and has formed a Native Hawaiian cultural advisory committee to help guide the redevelopment.

The broader fight over Coco Palms has also reached County of Kauai Council politics. In 2023, Council Chair Mel Rapozo floated eminent domain as a possible way to take control of the blighted property for public use, while the developer’s attorney said the ownership interest could be sold for $22 million. For Kaua‘i residents, the new financing is important, but the real test remains whether the county, the utilities and the community can get past the unfinished conditions that still stand between the site and a reopening.