South Kona homeowner facing fine for illegal vacation rental

  • Visitors enjoy a day at Pebble Beach in this undated photo. The owner of the home seen in the lefthand side of the photo is facing thousands in fines for reportedly operating the illegal vacation rental a stone’s throw from the water. (Chelsea Jensen/West Hawaii Today)

A South Kona homeowner is facing thousands in fines for reportedly operating an illegal vacation rental a stone’s throw from Pebble Beach.

The home, situated on 0.3 acres near the bottom of Kaohe Road in the Kona Paradise subdivision of Kaohe, has apparently been used as a transient vacation for more than a decade. That’s despite a conservation district permit granted allowing for the residence to be built but prohibiting such activity, documents submitted to the state Board of Land and Natural Resources show.


Staff came across the Gary and Caroline Killeen’s property on Oct. 9, 2019, as they were researching an unrelated case involving an alleged residence as a transient vacation rental in the area on the Vacation Rentals by Owner website. Advertisement names for the Killeen property included “Opihihale” and “Paradise Ocean Hale.”

“Further scrutiny of the advertisement for the subject property and associated SFR (single-family residence) revealed that it cost an average $250 per night with a minimum stay of 3 to 7 nights,” the staff wrote.

The advertisement also included 99 reviews, including one dating to 2009 titled “Million Dollar View.” Staff stated in the report the review indicates the property has been used for transient rental purposes prior to being listed on

After the state sent the Killeens a notice of alleged violation and order, the advertisement was removed by Oct. 23, 2019.

The 1,560-square-foot single-family residence features three bedrooms and two bathrooms and overlooks Pebble Beach. The residence was permitted under a conservation district use application granted in 1990 after the subject parcel had been fined $1,000 for three unauthorized uses in relation to development.

Conditions of the permit stated the dwelling cannot be used for rental or any other commercial purposes, unless approved by the board, and further prohibited transient rentals, or stays of less than 180 days, according to the state.

“The use of the property and associated SFR for transient rental purposes intensifies human activities as well as the uses and stresses of the area’s natural and cultural resources. Transient rentals are not consistent with neither the intentions of Hawaii’s residential neighborhoods nor the character of rural residential areas such as South Kona,” the staff wrote in their analysis. “Based on the above, the use of the property and associated SFR for transient rental activities do not align with neither the purpose of the Conservation District nor the objective of Limited Subzone and are therefore strictly prohibited in these areas.”

The staff recommended a monetary fine of $15,000 and administrative costs of $2,000 be assessed against the Killeens by the board.

The Board of Land and Natural Resources is set to take up the matter during its monthly meeting today in Honolulu.

Further recommendations included a directive from the board that such activities cease on the property and all advertisements that promote transient rental accommodations there be removed and that in the event the Killeens do not abide by the board’s order, the landowner be fined $15,000 per day until compliance is reached, among others. The staff also recommended revoking the 1990 permit should the Killeens continue to use the single-family residence for rental or commercial purposes.

Under Hawaii County’s new vacation rental law, operating a vacation rental on agricultural zoned land became prohibited effective Sept. 30, 2019, unless a short-term vacation rental noncomforming use certificate is approved by the Department of Planning.

A check of nonconforming use certificate applications submitted to Hawaii County through Sept. 30, 2019, did not list the Killeens or the property.

The county has previously stated most denials of conforming use applications relate to a state land use law that restricted structures to only farm dwellings in lots created after June 4, 1976, in agriculture districts. Others were denied because of shoreline violations in special management areas or for illegal or unpermitted structures.

Attempts to reach the couple were unsuccessful as of press time Thursday. County tax records do list a Lake Havasu City, Arizona, address for the couple.

The Department of Land and Natural Resources also did not respond to a request for comment on the allegation, as well as if it is looking at other properties in conservation districts for potential violations.

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