Keauhou Master Plan Released Today

February 1, 2004

Contributed by CEO Message

In addition, Kamehameha is beginning a search for an established, reputable development partner who shares Kamehameha's vision for educational, cultural and economic success in Keauhou, and who brings additional development expertise and capital to the resort. KS will be assisted in this search process, expected to take between 6 to 8 months, by investment advisor Secured Capital. Included below are excerpts from the media statement KS will release today. "This plan underscores Kamehameha Schools' commitment to a treasured asset. It envisions Keauhou as a thriving, interactive Hawaiian community for visitors and residents alike," said Kamehameha's vice president for endowment Kirk Belsby. "It recognizes the importance of this special place in the history and traditions of the Hawaiian people, and it brings this experience to the forefront to be shared with everyone coming into Keauhou." The plan features two distinct planning areas - both with a ma kai focus - at Kahalu'u Bay and Keauhou Bay. These centers will emphasize recreational and community gathering places; restoration, preservation and interpretation of significant cultural sites, and full enjoyment of Keauhou's natural beauty. New focus is also given to lowering residential densities for the area, reducing the reliance on hotels to attract visitors to the area. The size of residential home sites and multifamily units will be increased in response to market demand. "Keauhou is expected to benefit from the recovery of tourism and the huge surge in resort investment which has occurred all over West Hawai'i," said KS director of investments Susan Todani, who has responsibility for coordinating the master plan. "The master plan for Keauhou development - which aligns with Kamehameha's strategic plan and is truly a product of community dialogue and responsiveness to the market - will help define, revitalize and provide a stronger identity for the area." By joining forces with a development partner, Kamehameha Schools expects the pace of development and implementation of all aspects of the master plan to be accelerated. "A partner will bring resort development expertise and additional investment capital to this project," explained Louis Kau, president of Kamehameha Investment Corporation (KIC), the KS subsidiary that currently oversees the Keauhou resort. "We envision working closely with the developer to create a "critical mass" of new resort and residential features, and educational and cultural facilities that will make Keauhou a stronger, more self-contained and fully integrated community." Educational facilities, which would serve as a home base for Kamehameha Schools' extension education programs and other community-based educational services, are planned for the former Kona Gardens site near Kahalu'u Bay. This Community Learning Center (CLC) would host a variety of programs and services for adult and younger learners that will address health, wellness and family education needs within the Kona community, and provide a venue for Hawaiian cultural enrichment programs and career academies. The CLC would also serve as a staging venue for place-based educational programs integrating virtually all of the features and attributes of Kona and its neighboring districts. Complementing the educational facilities at Kahalu'u will be the Hawaiian Culture Center and Interpretive Center envisioned for Keauhou Bay. Combined, these amenities will feature interpretive trails connecting historic and cultural sites, halau and kahua grounds for performances and exhibitions, and other venues for cultural learning and experience. These centers will also provide community-gathering places that currently are in short supply in Keauhou. The Keauhou Master Plan is the product of nearly two years of community discussion and research. Kamehameha's Board of Trustees approved the plan in July 2003, and implementation is now underway. Ground was broken for the Sheraton Keauhou Bay Resort & Spa in early January, demolition of the old Kona Lagoon Hotel begins in May, and new Kamehameha Schools educational programs will be coming into the area this summer. These and other physical, visible changes will be emerging in the months ahead. Dee Jay Mailer Chief Executive Officer