by Natasha Wolff | September 22, 2017 11:00 am
Four years ago, Edwin Lucas and his family were looking to leave Whistler, the tiny British Columbia ski town where they’d spent the previous ten years. Lucas had retired in his early forties after a lucrative two decades working in finance in Asia. Regular vacationers in the islands, the family liked the resort life and the outdoors. But, well, so do lots of people. Oahu was a disaster; on Maui, he says, “We were always sitting in traffic.” That’s when he found the Big Island, and fell in love. There was no one there.
Around that time, Kohanaiki, a private residence club that offered homeowners access to five-star resort-quality amenities, was just opening its doors to buyers. “A friend said, ‘Just go for the free game of golf,’” Lucas recalls. The course was spectacular, designed by starchitect Rees Jones to include sweeping, almost distracting, views of the ocean and dramatic pond pits of black volcanic rock. Beyond that, he says, “there was a lot of ‘it’s gonna be this and it’s gonna be that,’” he says. Few built buildings, barely any club infrastructure, and only the promise of the on-call concierge and pricey clubhouse (and everything else) to come. Even so: he became the club’s investor #13.
Because there was one thing the developers promised there wouldn’t be. And that was tourists.
The Big Island of Hawaii is one of the state’s biggest and most geographically diverse, with 13 climate zones that travel the spectrum from active volcanos to snow-capped mountains. But it’s long been one of its least traveled, with most visitors and second homeowners opting for the five-star hotels and big named developments on Maui and Oahu instead, where the weather is reliable, the beaches are beautiful, and the shopping great. The Big Island’s rocky lava Kona coast didn’t fit with tourists’ idea of white sand beaches, there was no shopping to speak of and it was too big to walk anywhere. Those 13 climate zones resulted in unpredictable weather. It languished as a destination.
It took the development of Hualalai Resort, along a stretch of then-deserted Kona coast, for anyone to take notice. Silicon Valley types had been coming here to commune with nature, and not crowds, and the area famously became a favorite hideaway for Steve Jobs. Eventually, Dell computers’ Michael Dell bought Hualalai—he liked it that much—teamed up with the Four Seasons to manage it and turned it into one of the premier properties in the hotel group’s portfolio, a place so well done guests wanted to keep coming back. Soon, they could, with the hotel’s debut of its residences, which were an instant hit. Buyers—most of them second and third homeowners—saw it as the best of both worlds. They had the ease of owning in a managed community and the built-in pampering of a five-star resort with the smart investment of owning a piece. Similar models, including at Mauna Lani up the coast, followed.
But turns out that while buyers wanted to be treated like five-star hotel guests at home, they didn’t want to mingle with actual hotel guests. Hualalai eventually grew to some 240 guest rooms, and the private residences were available for rent as well. Which meant you never knew who you were going to get. That’s where the new breed of members’ only clubs like Kohanaiki and its neighbor Kukio—home to Wells Fargo CEO Paul Hazan and GoDaddy founder Bob Parsons—come in. Members-only means you know exactly who you’ll be getting, where they live, and how often you might expect to run into them. Random renters aren’t a problem, either—whereas many owners at Hualalai had been attracted by the ability to lease their places to help pay the mortgage, the sorts of people who shell out for memberships at Kukio and Kohanaiki—where buy-in starts at $150,000, and annual dues $25,000, and that’s before you even build your house—are well off enough that they don’t even care.
“The idea behind Kohanaiki was to create both exclusivity and community,” says Kohanaiki general manager George Punoose. “Like an ancient Hawaiian village where you actually know who your neighbors are. In a resort atmosphere, you don’t know anyone at the pool or on the golf course. Visitors come and don’t return for four or five years—they have no stake in the place.” What makes the private community option so appealing, he says, is the fact that the resort-residence model is so broken. “When resorts try to mix private ownership along with a hotel, one side always ends up getting jaded about the other based on who and what developers are focusing on,” he says. “At first, the focus is usually on selling homes, and taking care of potential homeowners. Once homes are sold, the focus moves to the hotel side and taking care of guests.” Someone always loses.
Punoose says that Kohanaiki has welcomed “quite a few” Hualalai expats who are done with the Four Seasons and come looking for something more exclusive; a place where the homeowner always comes out on top. “The homeowners are the ones who spend millions on a home,” says Punoose. “The daily guest only spends $1,000 a night.” At the Four Seasons, anyone can come and have sunset cocktails. That’ll never happen at Kohanaiki; the Kukio property, meanwhile, doesn’t even have an entrance sign. “The communities we’re talking about are very elite, and like nothing we’ve ever seen,” says Frank Schenk, a real estate agent who’s worked on the Big Island since the ’90s. “We now have some of the most expensive real estate in the world.” The current median home price along the Kona coast is now just under $3 million.
Developers have also started to focus on another Hawaiian island that’s remained relatively under-trafficked: Kauai, often referred to as the most local of the major Hawaiian Islands. NFL star Drew Brees is building a home at Kukui’ula, the site of a former sugar plantation, while the in-development, $800 million Timbers Kauai at Hokuala promises 47 residences by 2018. “You’re paying more,” says Timbers Managing Director Gary Moore. “But it’s not because we’re jacking up prices. We’re building an infrastructure team. We’re curating experiences. Everything—from the moment you step foot on the island to the moment you leave—will be taken care of for you.” Which, he says, is what today’s second/third homeowner cares about most. As work gets more wired and all-consuming, time has become the most valuable commodity of all. And while younger homeowners in particular want the investment and exclusivity, but not the responsibility, of owning a second or third place, most buyers at places like Timbers and Kohanaiki aren’t first-time second homeowners. They’ve done it before; they know what a hassle it can be. Which is why other islands have started to catch on, with ultra-exclusive developments in progress on Maui at Montage Kapalua Bay and on Oahu, which will debut a $300 million waterfront complex Wai Kai in 2019.
Homeowners at Kohanaiki, who include tennis pro Lindsay Davenport, golf champ Ben Crenshaw, actor Don Cheadle and plenty of hedge funders and tech entrepreneurs, will take pains to point out that shirking the resort crowd is not, necessarily, an act of snobbery. It’s less that they want to be exclusive and more that they want the freedom to be familiar. “We didn’t want to be part of a stuffy club,” says Lucas. “I didn’t want to move into a neighborhood where I didn’t know people’s names. That’s why I chose to join Kohanaiki. We’ve got the best of the best: Chefs who have worked at all the right places, former surf and golf pros. But there are no name badges, and there aren’t tons of rules. You’ll see people on the golf course playing barefoot.” (Chances are even good, he says, it’ll be a scratch golfer.) Certainly, these aren’t your parents’ planned communities: At Kohanaiki, there’s sushi on demand, a community organic farm and brewery on site, and a $65 million clubhouse, with bowling, CrossFit, and personal scotch and cigar lockers. And it doesn’t end on-site: Punoose organizes annual member golf trips to exotic courses—Cabot Links in Nova Scotia, Bandon Dunes in Oregon—as well as couples’ trips to Australia and Dubai. “Our members live for that kind of stuff,” he says.
The key to making that sort of thing work, of course, is to curate the right mix of people. And, well, socioeconomics is a powerful unifier. The developers of these clubs have essentially created the country’s most exclusive neighborhoods. “Most people who come here are world-class something-or-other,” he says. “But they leave their egos at home.” He loves impressing friends with views of the Pacific Ocean on one side and Ben Crenshaw teeing up on the other. But just as much, he loves that he can pop into the clubhouse on any given night and always find someone he’s excited to drink with. “Anyone can build a resort,” he says. “What’s more valuable is the ability to create a community.”
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