County Receives $20M to Complete Kona Bypass
An investment firm this week paid Hawaii County $20 million as part of a bankruptcy proceeding involving the upscale Hokulia development in Kona.
The payment was made by an affiliate of Sun Kona Finance I LLC, which had acquired Bank of Scotland’s loans for 150 Oceanside, the original developer of the Hokulia project.
The firm decided to complete the payment, which includes more than $389,000 in interest, in advance of the exit date later this month for Oceanside’s bankruptcy plan.
Oceanside owed the county $20 million for the completion of the Mamalahoa Bypass extending from the southern end of Ali`i Drive to the intersection of the Mamalahoa Highway and Napoopoo Road in Captain Cook.
The county at one point was preparing to foreclose on 80 lots in Hokulia used as collateral for the debt.
About 3.5 miles of the bypass has been completed, ending at Haleki`i Street in Kealakekua. That stretch opened for rush-hour traffic in 2009 and was completely opened early last year.
Sun Kona officials said today they wanted to pay the obligation to the county as soon as the bankruptcy plan was finalized.
“Our strategy at Sun Kona has always been to fulfill the unmet obligations of prior owners to the County of Hawaii and the West Hawaii community,” Sun Kona president Craig Pickett said.
The payment will help the county construct the final 2.2 miles of the bypass.
Mayor Billy Kenoi commended Sun Kona for taking care of the obligation ahead of schedule, and said construction on the final leg of the bypass is expected to begin later this summer.
The roadway, expected to ease rush-hour traffic between Kailua-Kona and areas to the south, was originally envisioned more than three decades ago.
The county made the roadway a condition of approvals for the Hokulia projects.
However, it has been mired in litigation between the county, Oceanside and the developer’s bond insurer over financing; and over the eminent domain process for acquisition of properties needed to complete the bypass’ southern end.