Ronnie Margolis, Kauai Realtor®, CDPE, ABR, RA - On Top of the Aloha Beat

Safeway said today it has completed purchase of the land for its Hokulei Village shopping complex between Lihue and Puhi and is going forward with development of a new Safeway Lifestyle store and surrounding retailers. Sale of the property — a 22.8-acre commercial-zoned parcel at the corner of Kaumualii Highway and Nuhou Street owned by Grove Farm — was finalized last week.

Now Safeway needs to secure a couple of more tenants and according to the news release in today's Honolulu Advertiser, they are currently talking to fourteen potential tenants. If you look at the aerial overview below, you will see planned Hokulei Village on the left of the image. There are also a number of commercial lots for sale in what is known as Kukui Grove West. Despite the pricing correction that is happening in the residential market of Kauai, the commercial market is still strong because there is very little commercial space on this entire island.

It will be great to have another large supermarket in Lihue in addition to Star Market and Big Save. And then of course, there's Costco, whose prices are amazing but their selection is sometimes limited.

Read the article in today's Honolulu Advertiser, detailing Safeway's commitment to Hawaii and Kauai. Here's to the hopes that they are able to follow through in today's economic climate.

On April 8th, The Garden Island published an article about a new value allocation approach being applied to Kauai condo's. According to the article, "After conducting site visits to all condominium properties on the island, the real property assessment office determined that the allocation of values between building and land for these properties needed to take into account differences in view planes and location within each project to better mirror their market values". This, according a a county news release.

Additionally, I received an email sent to all Realtors from the Real Property Review Officer further explaining, "For 2009, there was a major shift in how the total market value was allocation between land and building.  Since land tax rates ($6.90 per $1,000) are lower than building tax rates ($7.90 per $1,000), it made sense - in lieu of a single assessed value and/or single tax rate - to reevaluate this means of allocation.  The method utilized in prior assessments is known as “building extraction”, which places enormous weight on the improvements.  In trying to be more equitable, the relationship between land values (as derived from vacant comps) and building values (as determined from the replacement cost less depreciation) was examined and applied proportionally to the overall values.  The City & County of Honolulu began using these ratios to allocate total value between land and building before they eventually switched to single values.  With the Real Property Tax Initiative before the Kauai County Council, albeit deferred for the time being, it is imperative to appropriately account for the value contribution between land and buildings since the recommended tax rates for land and building may have a 3:1 relationship (i.e. $9.00 for buildings and $3.00 for land). Naturally, with the current market conditions continuing to deteriorate in 2009 , I’m sure it is difficult for property owners to see their assessed values above what they believe they can now sell their properties for.  Unfortunately, I am required to render the valuations as of a specific point in time using empirical data that was available to me prior to that date.

"In the Garden Island article, there was a small column stating that active listings not subject to distress situation were utilized as collateral data AND that the short sales, real estate owned properties and foreclosures were regarded as indicators of liquidation rather than market value. HELLO! Are these people serious or totally out of touch? The liquidation value IS the market value. Between 30 to 40% of the actual sales are distressed sales and it's the great bargains on Kauai that are finally moving the market. How the assessor can disregard this fact is completely beyond me. I have clients with a lot for sale at $995,000. We have not yet received offers after four months on market, YET, their assessment went up 35% percent for 2009. Adding to the confusion, many appraisals done for lenders are now coming in LOW. Appraisers and assessors are obviously working from a different playbook.

Walter Lewis, a frequent contributor to the Garden Island, published an article entitled, Not a Fair Fight, where he detailed the "kangaroo court conditions" that appear to be the modus operandi of the Kauai County Council and their tax constituency. We would like to see the county taxation reflect the reality of our realty market, not what was true several years ago. Unfair taxes have a way of hurting everyone.

What are the tax assessors doing in your community? If you live in a market that experienced great appreciation, are your assessed values reflecting the current market conditions? Let me hear from you...

By TwitterButtons.com

The Ko'a Kea Hotel & Resort officially resumed business yesterday as a boutique hotel, after years of renovation and permit processing, preceded by even more years of mouldering in place on Kauai's sunny South Shore. I've been hearing about this hotel for at least a year as my friend, Paul Koulbanis, started working there long before the place officially opened. Paul was formally the food and beverage manager at the PRINCEVILLE RESORT, and the timing of this opportunity at this new hotel turned out to be perfect for him.

The pocket resort, located next to Marriott's Waiohai Beach Club and Kiahuna Plantation, has a Hawaiian-themed spa with five treatment rooms, including a couples' suite; oceanfront massages are available. Treatments use "natural and indigenous ingredients, such as seaweed, pineapple, awapuhi root, red Kauai clay, guava and coconut," according to the press release.

Unlike the budget Poipu Beach Hotel of 20 years ago, this incarnation is obviously going for a romantic, grownups-oriented atmosphere, given the intimate ambience (only 121 rooms, with serene-chic interior design by Anita Brooks), posh amenities (L'Occitane toiletries, 42-inch flat-panel HDTV, iPod docking stations) -- and pre-recession prices.

I'm hoping to be playing some evening jazz there in the fine restaurant once the business gets up and running.

Read the full review from sfgate.com

Cool lobby and reception area at the Koa Kea Hotel

Pool and Ocean at the newly opened Koa Kea Hotel.

Ken Stokes reports on his SuSHI  sustainability blog about the ag forum that happened on Kauai this weekend. Read all about  Kauai Ag Forum and Sustainability

Be sure to check all of the links in Ken's posts. They are each little pearls of wisdom unto themselves. I saw Ken for coffee last week and he mentioned a community in Toronto where a group of people are growing food in people's back yards. In other words, the property owners let this group manage their garden because they know how to, and perhaps the owners are too busy. Then, this food is distributed amongst the 500 folks who are participating in this system. And that's in Toronto.

Imagine what would be possible on an island like Kauai, where everything grows whether you want it to or not!

At our GMM (general membership meeting) this morning, we had an engaging discussion about the state of Transient Vacation Rentals on Kauai.You see, the County Council passed an ordinance that went into effect last March, 2008, defining the rules and regulations of operating a transient vacation rental on our island. There were really two main components of this ordinance. First were the rules and regulations for those owners who were operating transient vacation rentals outside the VDA (visitor destination area). This means that anyone North of Princeville, say Hanalei, Wainiha, or Haena, with homes along or nearby to the beach, would be considered outside the VDA. The county established some extremely contingent criteria for what an owner had to submit in order to receive a NCUC (non-conforming use certificate) from the Planning Department of the County of Kauai. Along with a long list of criteria, the owners of these vacation rentals outside the VDA had to provide a "notarized affidavit". The ordinance stated that each owner needed to have their NCUC by March 31st, 2009.

Today we learned from Louie Abrams, our realtor board's super committed community expert and veteran of real estate and vacation renting, that over 200 applications over the approximately 500 that were submitted, were sent back, many because the affidavits were not notarized. This issue should not be taken lightly. The county's current attitude does not seem to be demonstrating much leniency on this issue and if these applications are eventually rejected, that means the properties in question will NOT be able to vacation rent their properties legally. For many buyers who purchase second homes on Kauai, generating cashflow from renting the home when an owner is off-island is important to the overall financial cost of ownership. A four-bedroom home on Hanalei Bay might rent for 6-7K a week and be occupied 75% of the time. That's a good chunk of cash to be generated by a home that you use part of the time. So, we're coming down to the wire ( over the next several months) with regards to the status on the properties outside the VDA.

This Hanalei Bay Home is outside the VDA but could possibly be a legal vacation rental with a proper Non-conforming Use Certificate

The second group of properties, are the hundreds, perhaps thousands of owners of condos and single-family homes, that are within the visitor destination area of Kauai. The planning department has not even begun to get to the applications of these properties. But, not to worry. Even if you missed the deadline for filing for your permit for this type of property, you can approach the county at any time to get your license. The county of Kauai is wanting owners to put their operating license number of the vacation rental on any marketing, advertising, and promotional stuff. This is a new twist to a business that has been operating for several decades very informally.