KAILUA-KONA — A Las Vegas-based vacation ownership company is asking the Leeward Planning Commission for more time to develop what was years ago conceived as a commercial/condominium complex on Alii Drive.
DPM Acquisition LLC, doing business as Diamond Resorts International, which took over the property in 2013, said in documents filed with the county Planning Department that it’s in the midst of making design modifications after finding the original design would cost tens of millions more than originally allotted.
The property is located in the bend where Kahakai Road meets Alii Drive just north of Kona Reef Resort.
In December 1998, the county Planning Commission issued a special management area use permit to then-owner Pacific Monarch Resorts for the development of a 6,500-square-foot, 4-story commercial retail office building and 48 2-bedroom condo units with 82 parking stalls and landscaping around the perimeter, according to county documents.
As a condition of approval the development was required to be completed within five years from the date of the permit.
Since then, the planning director and Planning Commission together have granted three time extensions in 2002, 2008 and 2014.
That 2014 decision by the Planning Commission extended the permit to May 15 of this year.
In 2013, Diamond Resorts acquired all of Pacific Monarch Resorts’ assets, planning documents state. A firm representing DPM Acquisition said in November that after taking over the property it discovered “fiscal challenges” with the project’s design “that make it impossible to meet the current deadline to complete construction.”
The company’s reps said a feasibility study to determine the current actual cost for the project’s original design turned up an actual cost that exceeded the original budget by $20 million-$30 million.
“As such, the applicant is currently in the process of modifying the design to make it economically feasible for build out and completion,” states the application.
Those changes could include removing the commercial components while keeping the original condos, parking and landscaping elements. The application said the redesign has resulted in delays, necessitating a need for another time extension.
The amended permit also requires the developer to install a sewer line and improve Kahakai Road and Alii Drive to include curb, gutter and sidewalk construction.
DPM Acquisition LLC said in their filed documents that those requirements haven’t been met, but said they plan to address the sewer requirement when they apply for construction permits and said the street improvements have been delayed as a result of the “unanticipated fiscal impact of the current project design.”
Diamond Resorts did not respond to repeated calls seeking comment.
