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My husband and I lived in Kauai, Hawaii for eight years. I sold resort real estate and created a successful newsletter. Here's a sample issue.
Photos by MICHAEL MEEK
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.
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!
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.
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,