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

Kukui'ula, which covers 1,010 acres between Po'ipu and Lawa'i Valley on Kaua'i's southern shore, is a luxury community planned for 1,200 homes, an 18-hole golf course, a resort spa, 75,000-square-foot commercial village and a 31-unit boutique hotel.

Described as "Kaua'i's Living Garden," the plan also includes $85 million in landscaping, a 20-acre lake, trails, a 5-acre beach park, a 20-acre community park and an 8-acre farm staffed by a resident horticulturist.

When the project was first released, the "founders" secured deposits for lots with a $50,000 commitment. Over 300 lots were reserved but not everyone followed through as the speculative climate for land began to deteriorate in 2006. Some of The lots in Kukuiula sold for upwards of $3 million for a 3/4 acre lot when the market was in a frenzy. Now, as sales have slowed, and the general climate for land purchases on Kauai has been compromised by the economy, comes word about Kukuiula's future.

According to General Manager of the project, Richard Holtzman"As the economic crisis has deepened in recent months, we have recognized we must plan for an even more protracted downturn," Holtzman said in a statement.

"The total capital needed to sustain the project will obviously be affected by the length and severity of the current recession. Thus, we are evaluating the long-term outlook, refining financial planning assumptions and discussing the best approach to meeting the growing capital needs."

Just goes to show you that our economy's downturn is effecting every nook and cranny of our market, even the developers with seemingly the deepest pockets.
The shopping center which is one small piece of the project, is just about completed and expected to open this summer. It is long overdue for more shopping and amenities in this most popular tourist destination on our island. I hope the shopping center stays on schedule. As far as the long term prognosis goes, without a financial partner, it may prove difficult for A&B properties to continue on.

Read the entire story from today's Honolulu Advertiser

There are also several lots for resale from the original buyers. If the project goes on hold, the lots prices may come down significantly.

The Hawaii state Supreme Court on Monday rejected a state law that allowed the Hawaii Superferry to operate while an environmental study is being conducted.Ruling the law was unconstitutional, the court sent the case back to Circuit Court, leaving the fate of the Superferry’s service between Honolulu and Maui in question.

Superferry officials, when contacted, had no immediate comment on the decision.

In light of the high court’s decision throwing out the law, the Superferry must stop operation until the study is completed, said Isaac Hall, an attorney representing three groups that challenged the Superferry in court.If the ferry service continues to operate, Hall said, the Sierra Club, Maui Tomorrow and the Kahului Harbor Coalition would seek a court order to stop it.

Gov. Linda Lingle said it would be “devastating for the Superferry to stop its operation.”

Attorney General Mark Bennett said the administration is not considering an appeal to the U.S. Supreme Court because there is no federal issue, but the court could be asked to reconsider its decision. The state had exempted the Superferry from environmental review in 2005.

But the Supreme Court later ruled that an environmental study was needed before the vessel could operate. That prompted the Legislature to convened in special session in 2007 and pass a law, known as “Act 2,” enabling the Superferry to run while an environmental assessment was drafted.

“Obviously we are hugely disappointed with the Supreme Court’s decision that Act 2 is unconstitutional," Hawaii Superferry said in a statement released this evening.

"We have operated on a regular, reliable and responsible basis for the past 11 months. During this time over 250,000 people have booked travel on Alakai and it has provided new economic opportunities for Hawaii’s businesses," the statement continued.

I'm sure those who have been enjoying the Superferry are disappointed but I'm glad the court found the Governor's ramrod policies to force the Superferry through as unconstitutional. Perhaps this is the end or perhaps another delay while environmental assessment is completed.

I saw Mayor Carvalho yesterday at a church in Lihue. The church was having a celebration for installing a new pastor. There was a great potluck and everyone seemed to enjoy themselves. I played in a jazz quartet that added a nice ambience to the event.

Today the mayor presented his state of the county where he outlined a number of key areas including:

1. Helping our Kauai Economy
2. Initiatives for more sustainability - (we could grow more food and use the wind to make more power for starters)
3. Caring for the needs of our people

One interesting point the mayor makes has to due with tax revenues. According to his reports, revenues will only be down three percent which is less than predicted. Currently our assessed values are more generally higher than the prices of the properties on island and so it's going to take time for the assessor's to reassign value to reflect the current market. Unlike some states, a property value does not simply reassess when a transaction occurs.

You can read the entire content of the Mayor's presentation about the state of Kauai County through this link

H.R. 1, the “American Recovery and Reinvestment Act of 2009,” passed the House on February 13, 2009, by a vote of 246 - 184. Later that day, the Senate also passed the bill by a vote of 60 - 38. The President signed the bill on February 17, 2009. The bill is a $780 billion package, with roughly 35% of the package devoted to tax cuts (mostly for 2009) and the rest to spending intended to occur in 2009 and 2010.

Congress and the President have announced that a finance and housing package (including tax provisions) will be the next “big” initiative, so Congress has by no means finished its work as it affects the housing industry.

The bill includes the following provisions:

Homebuyer Tax Credit

FHA, Fannie Mae and Freddie Mac Loan Limits

Neighborhood Stabilization

Commercial Real Estate

Rural Housing Service

Low Income-Housing Grants

Tax Exempt Housing Bonds

Energy Efficient Housing Tax Credits & Grants

Transportation Investments

Broadband Deployment


Homebuyer Tax Credit – The bill provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.


FHA, Fannie Mae and Freddie Mac Loan Limits -The bill reinstates last year's 2008 loan limits for FHA, Freddie Mac, and Fannie Mae loans. These limits were equal to the greater of 125% of the 2008 local area median home price or $271,050 for FHA and $417,000 for Fannie and Freddie, with an overall maximum cap of $729,750. For the few areas where the 2009 limits were higher, the higher limits will apply. In addition, the bill includes language providing the HUD Secretary with the discretion, if warranted, to increase the loan limit for any “sub-area”, i.e.an area smaller than a county. The Secretary's discretion is again limited by the $729,750 cap. These 2009 limits will expire December 31, 2009.

The inclusion of these loan limit provisions in the final bill is a victory for homeowners and buyers.

Neighborhood Stabilization – Division A, Title XII of the bill provides $2,000,000,000 in additional funding for the Neighborhood Stabilization Program (NSP). The NSP was created by the Housing and Economic Recovery Act of 2008 (Public Law 110–289) to provide grants through the Community Development Block Grant program (CDBG) to states and localities to address the problems that can be created when whole neighborhoods are decimated by foreclosures. The funds can be used to purchase, manage, repair and resell foreclosed and abandoned properties. In addition, the funds can also be used by states and localities to establish financing methods for the purchase and redevelopment of foreclosed properties. After purchase the homes must be used to assist individuals and families with incomes at or below 120% of area median income. Twenty-five percent of funds must be used for households with incomes at or below 50% of area median income.

Commercial Real Estate - Commercial real estate is impacted primarily through those provisions of the bill focused on green building and energy efficiency as well as business tax incentives. H.R. 1 provides significant funds for state energy programs, which could be used to support commerical property owners' investment in energy efficiency upgrades while commercial property owners seeking to invest in alternative energy systems for onsite power generation would benefit from the Department of Energy Renewable Energy Loan Guarantees Program. Of particular benefit to small businesses would be certain provisions of the bill that provide tax relief in the area of bonus depreciation and capital expenditures, as well as the 5-Year carryback of net operating losses for small businesses



Rural Housing Service – The bill provides an additional $500 million to existing USDA Rural Housing programs. The RHS provides both a guaranteed loan program and a direct housing loan program for those meeting the program’s eligibility criteria. The direct loan program will receive $270 million while $230 million will be allocated for unsubsidized guaranteed loans. It has been reported that this level of funding would provide for an additional 192,000 homeowners

Low Income Housing Grants - Allow states to trade in a portion of their 2009 low-income housing tax credits for Treasury grants to finance the construction or acquisition and rehabilitation of low-income housing, including those with or without tax credit allocations.


Energy Efficient Housing Tax Credits & Grants - To promote green jobs and energy independence, ARRA invests significantly in efforts to make homes and buildings more energy efficient. The bill provides state and local governments with $6 billion in energy efficiency and conservation grants for energy audits, retrofits and financial incentives. Through 2010, homeowners will be able to claim a 30% tax credit (up from 10%) for purchases of new furnaces, windows and insulation. Another $5 billion will be available to modernize the nation’s electricity grid and install smart meters on homes that help to save consumers money. There is also $5 billion for weatherization assistance for low income households and $2 billion for federally assisted housing (section 8) efficiency efforts

Transportation Investments - The bill provides $46.7 billion to states and localities for capital investment for surface transportation projects including highways, bridges, transit, and rail projects. These investments will tend to moderate traffic congestion and support a variety of transportation alternatives which will improve the quality of life of American communities and bolster the value of real estate

Broadband Deployment - The bill creates $7.2 billion in grants to promote broadband deployment in unserved and underserved areas and for mapping the availability of broadband service in the U.S. Any entity is eligible to apply for a grant including municipalities, public/private partnerships and private companies as long as they comply with the grant conditions. The grants are subject to “network neutrality” requirements to ensure that broadband networks be free of restrictions on content, sites, or platforms, on the kinds of equipment that may be attached, and on the modes of communication allowed.

The bill also charges the FCC is with developing a national broadband plan that shall seek to ensure that all Americans have access to broadband capability and shall establish benchmarks for meeting that goal.

So now you know... in case you didn't already. Mahalo and aloha from Kauai

Many people have this pre-conceived notion that there is not much to do on Kauai, aside from hiking, snorkeling, whale watching, etc. However, this island is bustling with talent and music abounds on every area of the island. It's true that there are not too many venues for LIVE BANDS on Kauai. In fact, Trees Lounge in Kapaa, Riptydes in Lihue, and Tradewinds Bar and Grill in Kapaa are the only venues on the East Side for Live Music.

There are many venues however for the singer songwriter, or slack-key guitarist. You can find a good North Shore schedule on the North Shore Kauai site, and the list is pretty accurate, except that Michael Ruff also performs on Friday night's at the new Westin in Princeville, a relatively new timeshare resort on the bluff overlooking the ocean.

My newest dance/funk band THE QUAKE, is gigging at Tradewinds this Saturday night, March 14th, and the following Saturday night, March 21st, at the fabulous Trees Lounge. We just finished our first demo and it's looking quite good. Check out my band the QUAKE, and tell me what you think. We are definitely fun to dance to and I have always enjoyed playing funky music. After all, i was born and raised in Philly, one of the R&B centers of the country, and grew up listening to THE SOUND of PHILADELPHIA, the signature sound of Gamble and Huff.

James Norman is the Quake's soulful lead singer!

Those who don't know me can start to understand why my personal byline is "On Top of the Aloha Beat". That's my real estate slogan and it applies literally and figuratively.