Hawaiʻi wants a greener economy. So why did its green bank just help a controversial luxury hotel get $245 million?

The state’s C-PACER program was supposed to help people finance cesspool conversions and condo repairs. Four years in, it finally approved its first project: a hotel Kauaʻi residents have fought for decades.

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The summary

Utah-based Reef Capital Partners is the latest in a long line of outside developers that has tried unsuccessfully to build a new luxury hotel in Wailua, Kauaʻi.

Instead of delivering the economic benefits Reef has repeatedly promised, the proposal has sparked extensive concerns around environmental, cultural, and economic impact, strain on housing and infrastructure, and permitting and legal issues.

Community opposition has exploded in recent years as local leaders explore and push for alternatives that they believe would be more beneficial to Kauaʻi’s environment and economy.

The hotel seemed to be stalled until June, when Reef’s lenders, X-Caliber and CastleGreen Finance, announced $431 million in new financing. That included $245 million, about 45% of the project’s estimated cost, through Commercial Property Assessed Clean Energy and Resiliency, or C-PACER, a state clean-energy financing program run by the Hawaiʻi Green Infrastructure Authority (HGIA).

State lawmakers created C-PACER in 2022 through a bill in then-Gov. David Ige’s legislative package, with the goal of spurring more investment in cesspool conversions. In 2024, they amended it through a bill in Gov. Josh Green’s package, with the goal of expanding the program to condos (which were facing an insurance crisis after the Maui fires).

So, the news came as a surprise to many, given the controversies surrounding the proposal and the fact that a luxury hotel would qualify for a program like C-PACER.

Kaheāwai Media obtained their C-PACER application through a (heavily redacted) public records request, and our reporting found:

1. Reef and its lenders oversold the project and funding.

They misleadingly announced the C-PACER money as delivered two months before the state approved it, and their proposal relies on outdated, incomplete, and unproven assumptions that likely overstate its benefits and understate its costs to Kauaʻi’s environment and communities.

2. HGIA’s review lacked independence and rigor.

It overlooked gaps in the application, bent its own rules, relied heavily on the lenders’ math, often let them set the pace, and even actively cheered the project on. For a project this controversial, it’s surprising HGIA wasn’t more skeptical.

3. And yet, they seem to have stayed within the current law.

C-PACER doesn’t require HGIA to consider a project’s permit disputes, community input, or overall impact on the environment or economic inequality. Reef, its lenders, and HGIA largely followed the program’s rules, and those rules are weak and vague.

4. Therefore, state lawmakers and the governor bear significant responsibility.

If they didn’t mean for C-PACER to help finance luxury hotels, the program has a loophole they need to close.

If they did, then despite all the talk about climate goals and diversifying the economy, they built a “clean-energy and resilience” program that so far has only incentivized more of the very kind of tourism Hawaiʻi is trying to depend less on.

Ultimately, whether the most responsibility lies with Reef and its lenders, HGIA, state lawmakers, the governor, county officials, or others who may have influenced things behind the scenes, a program that was supposed to encourage green investment instead helped secure $245 million for a controversial luxury hotel facing a litany of legal and permitting issues, local opposition, and environmental concerns.

HGIA’s approval materially helped Reef’s project move forward, and given current and past developers’ repeated challenges getting funding, it’s not clear whether or how Reef would have been able to get funding.

However, Reef’s project is far from a done deal — Tuesday’s election, legal challenges, planning department decisions, and an upcoming legislative session will all influence the future of how land is stewarded in Wailua. And as far as C-PACER goes, both HGIA and lawmakers can continue to make changes to the policy.

Also, a local environmental organization told Kaheāwai Media they plan to file a new legal challenge in the coming weeks, prompted in part by our reporting, that is expected to revolve around whether the project is in compliance with Hawaiʻi’s Environmental Policy Act.

The calls to action

At Kaheāwai Media, our stories are meant to equip people to act, not just to inform.

Media coverage of projects like this often frames the fight as “pro-development” versus “pro-environment.” That’s a false choice: it incorrectly assumes that the only possible kind of development is extractive, and that more of that development is the only way to help the local economy. We believe a more helpful way to understand this topic is to ask: how should land be used? And, who should those uses benefit?

If those are issues you care about, here’s how to weigh in, on Kauaʻi or in your own community:

1. Vote in your county’s elections. On Kauaʻi, the next mayor and council will appoint and confirm the planning commissioners who decide whether projects like Coco Palms move forward, no matter what happens with C-PACER. Every county in Hawaiʻi has a similar body making the same kinds of calls.
2. Ask your state lawmakers their views on C-PACER. Only the Legislature can change who the program serves and what HGIA has to check before approving a loan. Ask yours: Do you think C-PACER should help finance luxury hotels? If not, how would you try to fix the policy next session?
3. Follow the Hawaiʻi Supreme Court case. Friends of Māhāʻulepū, a Kauaʻi-based environmental group, is asking the court to let it challenge the project’s permits, which it argues have expired. The court agreed to hear the case, and we’ll let you know when it schedules arguments.

Want updates on this story? Text us at 833-709-2178 to get updates via Kāhea, our free SMS service. We typically send no more than one update per week, and you can opt out at any time.

The backstory

For more than 1,000 years, Wailuanuiahoʻāno held an abundance of cultural and environmental resources, from fishponds to heiau, and was one of Kauaʻi’s most significant religious, political, and social centers.

For fewer than 40 years, it was occupied by Coco Palms Resort, until Hurricane Iniki destroyed the hotel in 1992.

Since then, developers like Reef, the property’s current owners, have tried to rebuild a new luxury hotel, promising to bring jobs and money to Kauaʻi.

In 34 years, developers have largely failed on those promises.

Instead, developers’ proposals to build a new luxury hotel in Wailuanuiahoʻāno have sparked extensive controversies and local opposition, and left locals exhausted by the continued uncertainty.

Key concerns surrounding Reef’s proposal include:

• Environmental impact (building in a flood/tsunami zone and conservation land, increased water and energy use)
• Cultural impact (disturbance of ʻiwi kupuna and loko iʻa)
• Economic impact (uncertainty around who will benefit most — locals or outside investors)
• Housing impact (increased land prices and housing demand, workforce housing commitments that aren’t locked in)
• Infrastructure impact (exacerbating already-limited traffic and sewage capacity)
• Legal issues (three separate legal challenges involving the project)
• Permitting/zoning issues (possibly expired permits, issued under a since-repealed post-Iniki ordinance, that were contingent on developers making “substantial progress” within two years)

Even Kauaʻi County and the island’s own tourism industry groups, as far back as 2018, had acknowledged that Kauaʻi had reached its tourism capacity.

Citing all the reasons above, some have started wondering… is there an alternative that would be better for Kauaʻi’s land, people, and economy than another luxury hotel?

Support has been growing for cultural, community gathering, and/or agricultural spaces, and local leaders have already explored pathways for community groups or Kauaʻi County to acquire the property.

So, it came as a shock to many when X-Caliber and CastleGreen Finance, two New York-based lenders, announced in June that they were lending $431 million to Reef — 80% of the project’s estimated $539 million total cost. That included $245 million through C-PACER, a state-regulated loan program meant to spur investment in energy efficiency and climate resilience projects.

The press release promised $11 million in energy savings, more than 1,000 construction jobs, and 350 full-time jobs. It also claimed “the innovative approach” would ensure the project was “not just about immediate financial gain, but also about long-term environmental stewardship and a sustainable future.”

Based on our reporting, those claims were misleading:

• The hotel would add energy demand, not save it. According to its lender’s own estimates, the hotel would use about $930,000 worth of electricity a year — as much as 363 typical Kauaʻi homes — and that’s not counting anything plugged into outlets. They estimated the hotel would save $11 million in utility costs over roughly 34 years, but by our calculation, it would spend $60 million in that same time. That’s like a logging company cutting 60 million trees and claiming it “saved” 11 million by using its chainsaws more efficiently and not cutting 71 million trees.
• Both jobs claims are unverified. We found no jobs analysis in the 750+ pages of records HGIA reviewed, and neither Reef nor its lenders provided any.
• The C-PACER money wasn’t secured. HGIA, the state’s “green bank” and the agency that runs C-PACER, hadn’t given final approval. Still, at least four news outlets reported the financing as secured — and none mentioned HGIA’s lack of approval, skewing the public’s impression of the project’s status.

HGIA didn’t sign off until two months later, in August.

The concerns

Our reporting surfaced two key concerns:

Reef and its lenders are relying on outdated, incomplete, and unproven assumptions about their project that could be significantly overstating the benefits and understating its costs (see the chart at the end of this article for details).

Four years in, a policy that (in theory) was supposed to encourage investment in clean energy and resilience projects has, so far, only helped a controversial luxury hotel.

First, what is C-PACER?

C-PACE programs help property owners pay upfront for clean energy, water-saving, and climate-resilience improvements (like solar panels, efficient cooling or flood protection) and repay those costs over time (EPA). Only costs tied to those improvements are eligible — not just any construction costs. Hawaiʻi’s version, C-PACER, adds the “R” for resiliency.

In Hawaiʻi, HGIA reviews a project’s application, and if it meets C-PACER criteria, approves the loan and places a lien on the property. An HGIA-approved private lender loans the money, but instead of paying the lender back directly, the property owner repays HGIA, which passes the payments on to the lender. The lien forces the property owner to pay back that money before its mortgage and other loans. And, if the property is ever sold, the next owner takes over any unpaid loan payments.

In theory, that makes the loans less risky for lenders and easier for owners to get, spurring green infrastructure projects that might not happen otherwise.

What’s the concern with Hawaiʻi’s policy?

In short: it appears to be doing a bad job at figuring out whether a project will actually have a positive impact on the local environment or economy, and instead seems mostly focused on whether the property owner is using energy-efficient construction.

The EPA’s guidelines say C-PACE programs should consider:

• “Have communities participated meaningfully in the policymaking process?
• Does the policy help address the impacts of inequality, or does it widen existing disparities?
• How will the policy increase or decrease economic, social, and health benefits for communities?
• Does the policy make energy more accessible and affordable to communities?”

Yet, neither the C-PACER law nor HGIA’s approval criteria consider equity, community input, or a project’s health, economic, or social benefits to the surrounding community.

Hawaiʻi lawmakers passed C-PACER in 2022, citing the need to help people finance cesspool conversions. In 2024, after the Maui fires, they updated the law to make condos eligible. (And, in doing so, they cut counties out of the process, giving HGIA sole authority over approvals).

So we, like many of our sources, were surprised:

• How did a luxury hotel qualify at all, let alone 45% of its total estimated costs?
• How did the state’s green bank, which calls itself an “essential tool” for Hawaiʻi’s 2045 climate goals, approve a project with so many environmental concerns and no formal environmental assessment?
• Why was a luxury hotel the first project HGIA approved, four years into the program, while no cesspool or condo projects have been approved?

The process

To report this story, Kaheāwai Media obtained more than 750 pages of HGIA records on Reef’s C-PACER application through a public records request (though HGIA redacted about 25% of the content). We reviewed them with our community partner I Ola Wailuanui, our ʻAha Moʻolelo (storytelling council), and legal, policy and local experts, many of whom have followed this project for decades. In all, we consulted more than 20 people, including more than a dozen from Kauaʻi.

We asked Reef, CastleGreen, X-Caliber, HGIA, the Kauaʻi County Planning Department, DLNR, the lawmakers who voted to support the 2022 C-PACER law and its 2024 update, and Kauaʻi’s mayoral and county council candidates to respond. We’ll update this story as they do. You can check our work in the deep dive at the end.

The other players

This story focuses on C-PACER, HGIA, and state lawmakers, but many of our sources said the following entities have played key roles in failing to hold Reef accountable for issues with its proposal.

• Kauaʻi County, which has continued to treat the project’s decades-old permits as valid despite a legal challenge (see the calls to action section below). Whoever wins this fall’s mayoral and council races will appoint and confirm the planning officials who could decide what happens next.
• The Department of Land and Natural Resources, which has responsibility for two parcels leased by Reef, and oversees the conservation district where Reef plans to build a lūʻau, despite not having permits.

Feel like we missed (or misinterpreted) something? Contact us at connect@kaheawaimedia.com.

The replies

At the end of this story, we’ve included full responses from everyone we reached out to. Here’s the gist of what they said:

Reef Capital Partners: no reply.

X-Caliber: said the press release as normal business practice; the C-PACE loan was “progressing toward completion” and has since closed; its energy savings assessment was up to HGIA’s standards; and that Tarsia stands by his quote about environmental sustainability. Everything else it deferred to Reef or HGIA, citing confidentiality.

HGIA: said its review followed the statute and program rules, which check only whether the financed improvements qualify; environmental, land-use, and community benefit review happen through separate processes; HGIA doesn’t control in which projects come before it; lenders do their own underwriting as the private lender carries the risk; the pre-approval letter is a standard template; and the lender change happened because CastleGreen chose to lend through its parent company.

Lawmakers:

Rep. Nadine Nakamura: said C-PACER uses no state or county money and relies entirely on private capital; that Reef’s C-PACER loan is part of a larger loan package where the lenders run their own approval processes; and said the East Kauaʻi Community and Circulation Plan includes community priorities for “natural, cultural, and historic preservation” in Wailua and that she “intend[s] to keep this community-driven vision at the forefront” when considering state-level policy and future use of the area.

Note: two lawmakers reached out to talk with us on background (i.e. they wanted their perspective included in the story but without their name attached), but neither agreed to comment on record prior to publication. We chose not to include any of their background comments as we believe lawmakers have an obligation to their constituents to be accountable for their policy stances.

Gov. Green’s office : said it didn’t have enough time to verify whether Coco Palms is the only approved C-PACER project; that HGIA said other projects are being evaluated; that lenders, not HGIA, decide which projects to finance; that HGIA doesn’t play role in the approval process; and that the 2024 amendment gave authority to HGIA. It didn’t say whether the administration intended C-PACER to finance luxury hotels or whether anything should change.

Note: their claim that HGIA doesn’t play a role in the approval process is inaccurate. HGIA’s own program guide says a C-PACER loan can’t close until HGIA determines the project meets all statutory and program requirements and issues its approval, and that the lien is recorded, and money released, only after HGIA confirms all closing conditions are met and signs the assessment contract

Also, we want to note that we reached out to the Green administration on Thursday, Oct. 29th, later than our other sources, after realizing the C-PACER bills were part of the governor’s package. Their team acknowledged the request and sent this expedited/abbreviated response on Friday, Oct. 30th, around key questions we asked them. We will update if they reply further.

Kauaʻi County Planning Department: said they decline to comment on pending litigation; explained the flood rules (the proposed hotel is in the AE flood zone and the Sea Level Rise Constraint District, and new buildings must be one foot above flood levels); and clarified that environmental assessment and flood compliance are separate requirements.

DLNR: awaiting clarification.

Note: When we sent our request, DLNR was unaware of Reef’s plans to build on conservation land, and their reply was based on what seems to be incorrect information. We tried to reach them to get clarification and will update when we hear back.

Kauaʻi County Mayoral and Council candidates: Mel Rapozo, Fern Holland, Mike Coots, Dane Smith and Paul Noboru Applegate all oppose the hotel or doubt it as proposed. They cited cultural significance, flooding, traffic and infrastructure, and post-ʻIniki permits that shouldn’t justify building today. Most said our findings reinforce their concerns. None changed position; Holland said she’d been opposed for six years. Several called for transparency and a stronger county and community voice.

The deep dive

Want to check our work? Here are some key details that concerned us when reviewing the public records, and helped us reach our conclusions above. All unlinked sources are accessible via our public records request Dropbox folder. All other sources we relied on are linked below. For responses to each of these claims, see the full responses section below this chart.

1. Concerns about hidden costs & dubious assumptions
Concerns	Impact if true	Sources
NEW ENERGY DEMAND FRAMED AS “SAVINGS” The lender’s energy model says the hotel would “save” $11 million in utility costs over about 34 years, compared with a hotel built to 2015 energy standards. But the same model shows it would still use 2.3 million kWh of electricity a year, as much as about 363 Kauaʻi homes, not counting anything plugged into outlets. By our calculation, it would spend about $60 million on utilities over those 34 years.	A clean-energy program is helping finance a large new source of electricity demand, and calling it “savings” misleads the public about what C-PACER is paying for. One hotel won’t necessarily break the grid, but framing the project this way — especially as Kauaʻi and other islands are facing increasing power outages, infrastructure challenges, and increased climate risks — is misleading.	Energy Assessment pp.3–6, 8, 13, 20; DBEDT; Civil Beat; Kaheāwai Media calculation
UNDERESTIMATED FLOOD RISKS The hotel’s main guest buildings would sit “a minimum of one foot above maximum flood elevation,” near the mouth of the Wailua River. The lender’s only environmental report was a site assessment of whether existing hazards, like contamination, could affect the project. No environmental assessment has been done for the project. In 2023, DLNR declared its state-land approvals for the project exempt from one.	The project’s resilience claims are at odds with what’s known about this site and a changing climate. The risks: A hurricane destroyed the last hotel here. Parts of the site flooded “by several feet” in 2024. Hurricane Lowell flooded communities across Hawaiʻi in 2026. Sea levels are rising. And research shows that losing wetlands and coastal environments to development increases property damage from floods (as much as $8,000 annually per hectare, about 2.5 football fields). The assumptions: Reef’s one-foot margin is built to county minimums, its plans have not undergone an environmental assessment, and it expects some improvements to last 50 years, even as its own appraisal cites projections of a foot of sea level rise within about 30 years, the size of its entire buffer.	Energy Assessment pp.11, 19; ASR pp.8, 24; Appraisal p.178; DOH Clean Water Branch, NPDES Construction Storm Water Inspection Report (04/16/24); County of Kauaʻi; Environmental Notice; DLNR; Resources for the Future; Maui Now; Hawaii News Now
LŪʻAU & PARKING ON CONSERVATION LAND The lender’s file plans a 15,900 sq. ft. lūʻau pavilion, food prep area, parking lot and comfort station, open to “outside guests,” on a parcel in the State Conservation District. DLNR said in 2023 that no permit had been sought “for any land use” there. Separately, in 2024, it fined Reef’s RP21 Coco Palms LLC $2,000 for unpermitted clearing on the adjacent “Coconut Grove” parcel, which the company leases from DLNR. In 2023, the state health department cited the developers for construction at the main resort site without a stormwater permit.	Reef plans a commercial cultural attraction on conservation land without the proper permits. None of the lūʻau plan can be built without a Conservation District Use Permit, and we found no record that Reef has applied for one. DLNR found no protected species or cultural resources in the cleared area, and the owner said it was cleaning up illegal dumping. I Ola Wailuanui and other cultural practitioners have repeatedly raised concerns about how Reef has engaged with practitioners and lineal descendants.	ASR pp.10–11; DLNR, Notice of Alleged Violation & Order (04/19/23); DLNR, Notice of Civil Resource Violation (07/05/24); DOH Clean Water Branch, Field Citation (12/20/23); HAPA; Kauaʻi Now
MISSING ESTIMATES OF WATER, SEWER, TRAFFIC, AND HOUSING IMPACTS A 351-room resort with three pools and 371 parking spaces would add traffic to Kūhiō Highway, but the most recent traffic study we found is from 2015. Its sewage would flow through the Coco Palms sewer pump station, which has spilled multiple times. Its only water estimate (about 4.6 million gallons a year, our calculation) appears to cover only showers, sinks and toilets, not pools, landscaping, kitchens or laundry. Title records also show its workforce housing agreement with the county was amended in 2025, and three parcels were released from it.	The records HGIA based its approval on leave out real costs that could fall on residents. More congestion and slower evacuations on Kūhiō Highway, more strain on sewers near the Wailua River, and more pressure on housing are real costs. Incomplete or outdated estimates don’t make them go away. They just make it harder to hold Reef accountable if those costs show up in the future.	ASR pp.4, 9; Energy Assessment pp.3, 13; Status of Title Report items 8–9; IQ Report item 19; County of Kauaʻi; Coco Palms Declarants filing to Kauaʻi Planning Commission (11/22/23)
2. Concerns with portrayals by Reef and its lenders
FUNDING ANNOUNCED BEFORE HGIA APPROVAL X-Caliber’s June 22, 2026 press release said it “delivers” $431 million in financing, including the $245 million C-PACER loan, before HGIA had approved it. Several key steps weren’t finalized until well after the release: July 22: HGIA reissued its pre-approval letter. Aug. 20: the entity the lenders said would be funding the loan still wasn’t on HGIA’s approved-lender list, as its rules require. Aug. 24: Reef’s mortgage lender consented to the loan. Aug. 27: HGIA gave its final approval.	The public was told the money was locked in two months before the state approved it. Lenders typically agree on terms before the state signs off, but HGIA’s rules don’t let a C-PACER loan close or release money until HGIA approves it and the lien is recorded. None of the coverage we reviewed mentioned that HGIA was still reviewing the project. That made the hotel look further along than it was, which could have shaped how residents and officials responded in the following months.	X-Caliber press release; Pre-Approval Letter (07/22/26); Emails (08/17/26–08/20/26); Lien Holder Consent; Summary Memorandum; Program Guide pp.16–17; Kauaʻi Now; Civil Beat; Commercial Observer; Travel Weekly; Star-Advertiser
UNPROVEN CLAIMS ABOUT JOB CREATION X-Caliber’s press release promised more than 1,000 construction jobs and 350 full-time jobs. HGIA’s approval letters go further, saying the project “will fulfill vital public purposes of the State,” including “promoting economic development and job creation.”	Jobs are one of the hotel’s most-touted benefits, yet nothing we found shows anyone checked the math or asked how much of the profits will go to local workers vs. outside investors. The unredacted parts of HGIA’s records include no jobs analysis: nothing on how many jobs would go to Kauaʻi residents, or how much of the hotel’s income would stay on-island rather than go to investors and operators in Utah, New York and elsewhere.	X-Caliber press release; Kauaʻi Now; Pre-Approval Letters (03/29/25, 07/22/26, 08/19/26); Appraisal
INACCURATE PROPERTY TAX CERTIFICATION On Aug. 24, 2026, the CFO of RP21 Coco Palms LLC, the Reef company that owns the property, certified to HGIA that it was “current on… property tax payments… for the previous three years.” But its 2026 taxes had been due Aug. 20 and weren’t paid until Aug. 26, with what appears to be a 10% late penalty. Title records show its taxes were also delinquent in 2024, and on at least one parcel they were paid more than six months late, in March 2025, about two weeks before it applied for C-PACER.	Reef gave the state inaccurate information on a basic eligibility requirement. C-PACER requires owners to be current on property taxes. The issue isn’t being a few days late paying taxes; it’s that this raises questions about the accuracy of the rest of the application.	Property Owner Certification p.2; County tax records (4-241, 4-296, Cultural Center); eHawaii Payment Receipt (08/26/26); Email (08/26/26); Initial Title p.10; qPublic, TMK 4-1-003:004; County of Kauaʻi; Program Guide pp.8, 26
3. Concerns with HGIA’s review process
PRE-APPROVAL DRAFTED BEFORE THE APPLICATION ARRIVED The lender asked HGIA for a pre-approval letter before applying. HGIA’s director drafted it, sent it to the lender for feedback, and issued it one day after receiving the completed application, which had a blank owner-eligibility section. The letter still says HGIA “reviewed the application.”	HGIA’s first C-PACER project review was repeatedly deferential to the entities it was supposed to be scrutinizing. Working cooperatively with applicants isn’t the problem, and issues with the application could have been addressed prior to HGIA approving the project. The concern is that HGIA repeatedly gave this project the benefit of the doubt despite its documented violations, tax delinquencies, and title, permit and legal challenges.	Emails (03/13/25, 03/23/25, 03/24/25, 03/28/25); Application pp.2–3; Pre-Approval Letter (03/29/25); Initial Title p.10; qPublic, TMK 4-1-003:004
UNCLEAR HOW CLOSELY HGIA CHECKED THE LENDERS’ CLAIMS In several places, HGIA appears to have taken the lenders’ claims at face value or bent its own rules to accommodate them. Because of the redactions, we can’t tell whether or how HGIA, a small agency, verified those claims. Examples:“ Qualifying” costs: The lender certified that the $245 million covers only eligible costs. Every dollar figure is redacted, and so is an HGIA email about the energy audit’s findings. Property value: HGIA requires an appraisal less than a year old when a project applies. This one, from around October 2024, met that in 2025, but was reused for the 2026 approvals. It describes a 47.94-acre site, though the lien covers about 13 acres, and it assumes clear title and that permits “can be obtained.” The lender itself: HGIA requires lenders to be approved. CastleGreen is, but it planned to hand the loan to a company that wasn’t. HGIA quickly agreed to the lenders’ workaround: close in CastleGreen’s name, then transfer the loan. Because HGIA redacted that company’s name, we can’t confirm it’s on HGIA’s approved list.	It’s unclear whether/how HGIA checked the numbers and claims justifying a $245 million state-approved lien that will stay with these properties even if sold. We’re not alleging anything illegal. But in key places, HGIA appears to have trusted or accommodated applicants whose project has a history of violations, tax delinquencies and legal challenges. If HGIA did more, its redactions keep the public from knowing.	Lender Attestation (08/24/26); Energy Assessment pp.14–16; Email (07/03/25); Appraisal (transmittal; assumptions 1, 13); Summary Memorandum; Pre-Approval Letter (08/19/26); Emails (08/17/26–08/20/26); Program Guide pp.19, 23
CHEERLEADER, NOT REFEREE HGIA’s director called it “a great project,” in an email sent while the project was on hold for reasons HGIA redacted. Other examples: Promoting the deal: She offered lender “first dibs” on edits of HGIA’s press release about the project, and let Reef’s CFO and the lender’s marketing staff help write it. Rooting for the financing: When the lender said the C-PACER financing was delayed, she replied: “Glad to hear that the PACE financing is still happening.” Vouching for public benefit: Every approval letter says the project “will fulfill vital public purposes of the State,” including “improving the environment.”	The agency responsible for vetting the deal was also promoting it. Supporting the program’s first project is understandable. But HGIA’s enthusiasm, and its willingness to let the lender and developer shape its messaging and paperwork, raise questions about whether it was evaluating this project independently.	Email (11/04/25); Email (05/04/26); Email (07/15/26); Email (07/22/26); Emails (08/06/26); Email (08/21/26); Pre-Approval Letters (03/29/25, 07/22/26, 08/19/26)
4. Concerns with how C-PACER was designed
NO ENVIRONMENTAL REVIEW, NO PERMIT CHECK Neither the C-PACER law nor HGIA’s criteria require an environmental review, a check that the project’s permits are valid, or a look at the owner’s record of violations. HGIA approved the lien while the project’s permits were being challenged in court, and with no environmental assessment on record.	A state agency can attach a 30-year lien to land, binding every future owner, without checking whether the project can legally be built or what it would do to the environment.	Act 183 (2022); Act 41 (2024); Program Guide pp.8, 22–23; ASR p.7; SCWC-25-0000025
NO COMMUNITY BENEFIT OR EQUITY TEST, AND NO COUNTY ROLE EPA’s C-PACE guidance urges programs to ask whether they help address inequality and bring economic, social and health benefits to communities. Neither Hawaiʻi’s law nor HGIA’s criteria ask those questions. The 2024 update (Act 41) also ended counties’ ability to run their own programs, leaving HGIA as the only gatekeeper.	Lawmakers built a program that can steer hundreds of millions of dollars into projects without asking whether they help or harm the communities around them. And, the local government that knows those communities and projects best has no formal role in the review process.	EPA, Commercial Property Assessed Clean Energy; Act 183 (2022); Act 41 (2024); Program Guide; Email (03/05/25)
THE DEBT STAYS WITH THE LAND The C-PACER lien “runs with the land” until 2057. If the hotel stalls and the property is sold, the next owner, whether a land trust, the county or anyone else, takes over the remaining payments or has to negotiate a payoff. Even a foreclosure sale doesn’t erase them.	A state program may have made it harder and costlier for the community to ever bring this land back into local hands.	Assessment Contract §§4(d), 5(a)–(c); ASR p.4; Program Guide p.20