Developers behind the long-stalled Coco Palms hotel project on Kauai have secured a $431 million loan to reconstruct the 1953 resort that has been closed since Hurricane Iniki ravaged the island in 1992.
The financing package, announced by commercial real estate lender X-Caliber, includes $185.6 million in conventional senior-secured debt and $245.35 million through the firm’s Commercial Property Assessed Clean Energy, or C-PACE, program. The C-PACE portion was arranged through X-Caliber affiliate CastleGreen Finance.
Jon Day, chief financial officer at Utah-based Reef Capital Partners, which leads the development, said finalizing the loan was “the pivotal final step” in moving the long-stagnant project toward construction. The company has been working for years to revive the historic property.
Construction is scheduled to begin next year, Day said. The project now has a target opening date of 2028, and the rebuilt resort will operate under the name Coco Palms, A Kimpton Resort.
The C-PACE loan is a financing tool that allows developers to fund clean-energy improvements through a municipal property assessment. The loan is repaid as a special assessment on the property tax bill, meaning the obligation stays with the property even if it is sold.
The Coco Palms resort opened in 1953 on Kauai’s eastern shore and became one of Hawaii’s most famous hotels, known for its lagoons, coconut groves, and thatched-roof cottages. Elvis Presley filmed the 1961 movie “Blue Hawaii” there, and the property also hosted Frank Sinatra, Rita Hayworth and Bing Crosby over the decades.
Hurricane Iniki, a Category 4 storm that struck Kauai on Sept. 11, 1992, caused catastrophic damage to the property. The resort never reopened. Multiple redevelopment attempts over the following decades failed to materialize.
The revived project, which will include 351 rooms, represents one of the most significant hospitality investments on Kauai in years. The financing comes as Hawaii’s tourism sector continues to recover from the pandemic-era downturn and from the economic impacts of the 2023 Maui wildfires, which reshaped visitor patterns across the state.
The lenders’ structure — pairing conventional debt with C-PACE financing — has become more common in large-scale hospitality redevelopments as developers seek ways to lower the cost of capital by bundling energy-efficiency upgrades into long-term property assessments.