PD BACKGROUND REPORT (PL-SMA-2023-000038)

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September 6, 2023 Mr. Zendo Kern, Director Planning Department COUNTY OF HAWAI'I 101 Pauahi Street, Suite 3 Hilo, Hawaii 96720 Dear Mr. Kern, Subject: Special Management Area Use Permit Application Applicant: Kona Hawaii Development, LLC Kailua Village, Pua'a 3rd, North Kona, Hawaii,TMK 7-5-018: 011 The subject property, consisting of 1.76+ acres, is located on the makai corner of Kaheka Road and Ali'i Drive. A SMA Permit (SMA 98-7 and later assigned 388) was issued to allow the construction of a 48 hotel/condominium project. Over time, the land was cleared, and the foundation and basement area were permitted and constructed. However, the SMA Permit was automatically nullified on or about January 30, 2023, due to its non-compliance with the time performance condition. Using the same footprint, foundation, and basement area, the applicant, Kona Hawaii Development, LLC, an LLC formed by Baywood Dia, Inc. (Diamond Resorts) wants to complete the partially constructed project. Rather than 48 large condo/hotel units, using the same and previously approved footprint, the applicant wishes to develop a 91-room suite with a kitchenette and 9 standard guest rooms, all consistent with the site's Resort (V-.75) zoning. Once completed, the hotel would be tentatively operated as a Residence Inn by Marriott. Attached is a report which includes the plans and pertinent exhibits, as well as a discussion of the project and its relationship to the SMA policies and guidelines. Also attached is a list of the surrounding property owners within 300 feet of the subject property. Should you have questions on this matter, please feel free to contact me on this matter. Thank you very much! Sincerely, SIDNEY FUKE Planning Consultant Enclosures Copy—Mr. Nick Naik, Kona Hawaii Development, LLC w/enclosures