The idea of building a hospital in West Maui has been around for at least a quarter-century.

Maui Memorial Medical Center is about 40 minutes away — if there is no traffic or road flooding. Kula Hospital is more than an hour away.

“We need this facility here more than ever after Lahaina being gone,” state Rep. Elle Cochran said, referring to the devastating 2023 fire that burned much of the town. “We don’t even have a clinic.”

So will it ever be built?

Proponents and possible developers are still pursuing the proposed hospital in Kā’anapali, but they say the county has backpedaled on a key component — a commitment to be the guarantor of state-issued bonds to kickstart construction.

“I just think they’re just throwing out every excuse in the book to just not want to support it,” Cochran said of Maui Mayor Richard Bissen’s administration.

Bissen says otherwise. While his administration fully supports the hospital project, the county must carefully evaluate the financial feasibility and potential risks of every project, he wrote in an email to Civil Beat.

The West Maui Hospital Foundation manages the proposal and its fundraising. It turned to the Legislature in 2023 to authorize $20 million in special purpose revenue bonds to start construction. The foundation’s president said the county had agreed to be the guarantor, which is vital to find a lender.

Ultimately, up to $120 million more would be needed to complete construction.

“Over the past year, the parameters of the foundation’s request have changed, and proposed funding sources have not materialized, which posed significant challenges,” Bissen said, adding his administration is “grateful for the dedication and persistence” of the foundation.

The hospital is basically ready to be built, with essential infrastructure laid down and all legal conditions fulfilled, according to Newport Hospital Corp. president Brian Hoyle. An experienced hospital developer, he said he has invested more than $20 million in the project over the last 17 years.

“I spent the last 40 years of my life building hospitals,” Hoyle said. “I built 50 hospitals of all types, you name it, medical buildings, nursing homes, and I’m still involved in health care ownership.”

Plans for the proposed 25-bed critical access hospital include a 24-hour emergency room, three operating rooms, a lab, radiology services, a pharmacy and outpatient services, Hoyle said. The nonprofit hospital would be built on a 5-acre portion of a 15-acre land owned by Hoyle. The rest of the land would be leased by private health care businesses.

To begin the first phase of construction, proponents hoped the county would be the guarantor for $20 million in special purpose revenue bonds authorized last year by the Legislature and Gov. Josh Green.

Hoyle said the bonds would be sold in a public market so private investors would put up the money as long as Maui County is a guarantor. He said state officials, then-county finance director Scott Teruya and the Maui bond counsel had told him and other stakeholders this was possible last year.

But Teruya was fired earlier this year, and Hoyle said the new finance director, along with the new bond counsel, are now saying this isn’t possible.

Jo Anne Johnson Winer, president of the West Maui Hospital Foundation, said she thought the August 2023 wildfires would bring more urgency to having a hospital on West Maui, but “the current administration seems to feel that housing is a greater urgency than medical care.”

Johnson Winer said full funding to build the entire hospital will more than likely come from a combination of resources, including federal allocation, private donors, philanthropic efforts and loans.

“None of us knows what that formula is going to be, but we just want to get to first base,” she said of the need for a guarantor of the state bonds. “That’s all we’re asking. They can talk all that they want, but if your local government is unwilling to put their money where their mouth is, how can you get to first base?”

Still, she remains optimistic. As a County Council member from 2000 to 2010, Johnson Winer supported the hospital since its early stages of planning.

“I believe that the hospital will be built; I don’t have any doubt about it,” Johnson Winer said.

After Legislative Success, A Curveball

Cochran successfully co-sponsored House Bill 1255 in the 2023 legislative session, which was signed into law as Act 73 by Green, authorizing the issuance of the bonds. Since the bonds’ debt service needed backing, Cochran said, the county had agreed to be the guarantor.

Fast-forward to last October, when the Maui County Council had a resolution on the agenda introduced by council member Tamara Paltin urging the county to “provide for the establishment of the proposed West Maui Hospital and Medical Center through the guarantee of state purpose revenue bond issuance.”

At that council meeting, consultant Charles Slaton gave a short presentation on the project’s status. He is also the CEO of Critical Access Healthcare Management, the company contracted to build and manage the hospital. Hoyle and Slaton have a long history of working together to develop hospitals.

Slaton’s presentation was followed by county managing director Josiah Nishita, who started by stating Bissen’s support for a private hospital in West Maui.

Everything pointed to the hospital finally coming to fruition. But then came the curveball.

“I’m not aware of our bond counsel seeing this as a low-risk investment,” Nishita said. “In fact, I believe it’s the opposite.”

There is a reason other hospitals have not agreed to be part of the project, he said.

“If it was a low- or no-risk investment, there would be definitely more consideration from other entities like Kaiser or Queens or what-not to participate,” Nishita said, adding that hospitals generally lose money in Hawai‘i.

“I would have really wished that they had told us this 18 months ago, because then I would not have wasted my time.”

Jo Anne Johnson Winer, West Maui Hospital Foundation

This surprised Johnson Winer, who said it was the first time she heard the county would not be the guarantor for the bonds’ debt service.

“I would have really wished that they had told us this 18 months ago, because then I would not have wasted my time,” she said. “We could have been out doing fundraising.”

The county, however, says it did not change the agreement. It was the foundation that changed the terms and the use of the funds, making it challenging for the county to assist them, Laksmi Abraham, county communications director, wrote in an email to Civil Beat.

“It is the county’s understanding that when the special purpose revenue bonds were originally discussed, the West Maui Hospital Foundation had a plan for the capital stacking for the remainder of the project, including USDA funds and private sources,” Abraham said.

The county had supported funding for the hospital’s construction, Abraham said. But since then, she added, the funding to complete the project has not come to fruition, and the foundation was proposing to buy land with the bonds rather than constructing the hospital as part of the original agreement.

Abraham said the administration had also agreed to the original proposal for the bonds because the foundation had committed the land as collateral in case it defaulted on the bonds.

Johnson Winer, however, said buying the land was not in the foundation’s original plans; it only proposed it because the county wanted collateral. But since Hoyle, who owns the land, agreed to a “very reasonable” 60-year lease, she said funds would be better spent by building the hospital rather than acquiring the land.

Pulling Back From The Guarantor Role

While acknowledging the bonds’ marketability with the county acting as the guarantor, Nishita told the council this is not a requirement in the legislation.

House Bill 1255 had in its original language a requirement for the county to be the guarantor for the bonds’ debt service, but that was pulled out in the bill’s final version.

On March 14, Bissen sent testimony in support of the bill. Two weeks later, he sent more testimony, still in support of the bill but now asking lawmakers to remove references to any guarantor for any debt service on the bonds.

“It is our intention to continue to work with the West Maui Hospital Foundation in an effort to move this project forward,” Bissen wrote in the later testimony.

Johnson Winer said she also asked lawmakers to remove the county as a guarantor because it could have caused legal problems for the bill. But it was just to keep the legislation within legal parameters — she still thought the county would not back out from being the guarantor.

Nishita said when Bissen submitted testimony to the Legislature, the project was different. The hospital was supposed to be a six-bed facility, but now it is projected to have 25 beds. With that, he said, the cost went from $40 million to $140 million.

But Johnson Winer said the original plan was for a 25-bed facility. The reason the foundation once considered a smaller hospital, she said, was because the U.S. Department of Agriculture was being tapped for a loan that would be easier to obtain with the smaller model.

Slaton said he was working closely with the USDA Rural Development Department toward a loan for the hospital in 2022 — he had already found financing for three hospitals elsewhere doing this. But recent changes in federal policies, he said, caused the plans for a USDA loan to fall through.

“It’s basically shovel-ready. We have all the entitlements. We have water rights, the water and sewer lines are all in.”

Brian Hoyle, Newport Hospital Corporation president

Since the USDA is not involved as a lender anymore, Nishita said the total cost of the hospital could be “in some way tied up to the county.”

It would include the $20 million in guarantee for the bonds, he said, plus $120 million more to complete the hospital construction, potentially from a Community Development Block Grant Disaster Relief fund through the federal Housing and Urban Development agency — if the county receives this grant.

Johnson Winer said she hopes HUD’s block grant would finance the hospital, but there are no guarantees the county will receive it, how much the grant would be for, and if it would be used for the hospital.

The foundation can also still utilize a special purpose revenue bond through the state government without the county acting as a guarantor, Abraham said.

The council’s hospital resolution was eventually thrown in a pack with other bills and resolutions deferred to the chair of the next council term starting Jan. 2. But not before current council chair Alice Lee said she wanted to “remind everybody that this is in the West Maui Community Plan, so it is a priority. The community came in force supporting this.”

The day before Thanksgiving, Slaton, Hoyle, Cochran, Johnson Winer and their attorney met with Nishita and other county officials to propose an alternative. Since the county didn’t want to be a guarantor anymore, they asked for a $5 million reimbursable grant or a $5 million grant in matching funds. Hoyle said they presented a budget to county officials, who said they would get back to them.

Abraham said that after that meeting, county officials recommended the foundation prepare a formal grant application including an updated budget, pro forma financials and building specifications.

“This was encouraged in light of preparation of the fiscal year 2026 budget which will be presented to the council on March 25, 2025, so there is time for the foundation to request a grant,” Abraham said.

A Project With A History

In 1999, the nonprofit West Maui Improvement Foundation successfully fundraised for a fire and ambulance station in Napili. Its board then decided to fundraise for a hospital.

A few years later, after Kā’anapali Land Management Corporation donated a 15-acre parcel behind the Lahaina Civic Center for the hospital, WMIF president Joe Pluta said Hoyle approached him with interest in the project.

“He was the only one who was saying he was willing to spend hundreds of thousands of dollars and take the risk,” Pluta said of Hoyle. “He funded all the consultants and fees, and refunded us all the money that we had previously paid out.”

But two weeks before a final land subdivision approval, the Hawaii Supreme Court issued a decision that no ceded lands — lands that belonged to the Hawaiian Kingdom when the monarchy was overthrown — could be used for permanent easements, sold or conveyed without authorization from three-quarters of the Legislature, Pluta said.

The land itself wasn’t affected by the court’s ruling, but the problem was an easement less than a hundred yards long that was part of ceded lands and could not be used anymore. Essentially, the foundation had the land but no access to it.

“It set us back three years,” Pluta said.

“God bless his heart for never throwing in the towel and giving up.”

Rep. Elle Cochran, referring to hospital developer Brian Hoyle

Another 15-acre parcel next to Kā’anapali Coffee Farms was then identified as a viable site in 2014. Unlike the original parcel promised as a donation, the new land had more improvements, Pluta said, and Hoyle had to pay landowner Kā’anapali Land Management Corporation $4 million.

“It was such a terrible turnaround for him,” Pluta said. “I’m so sorry that I was powerless with that whole thing. There’s nothing I can do about it.”

Eventually, Hoyle would part ways with Pluta and found the West Maui Hospital Foundation to take over the project. Despite the initial downturn, Hoyle kept pushing for the hospital.

“God bless his heart for never throwing in the towel and giving up,” Cochran said.

Hoyle’s company, Newport Hospital Corporation, graded and built improvements on the land for the proposed hospital.

“It’s basically shovel-ready. We have all the entitlements. We have water rights, the water and sewer lines are all in,” Hoyle said. “It’s a matter of just getting financing, which has been difficult for the foundation because it’s not part of a larger entity like Hawaii Pacific Health or Queens.”

West Maui Hospital, he said, is a startup enterprise, but it would also be a nonprofit hospital.

“It’s one of the last things Jo Anne (Johnson Winer) and I will ever do in our lives, it’s going to get built one way or the other,” Cochran said. “It’s just we really would wish we could get it going now.”

Abraham said the county has been working with the foundation since March 2023. Hospitals are generally not funded by counties, she said; they are either privately run or work in coordination with the state.

“The West Maui Hospital Foundation is asking the County of Maui for taxpayer resources, and as such due diligence needs to occur to ensure public funds are utilized properly,” Abraham said.

Civil Beat’s coverage of Maui County is supported in part by a grant from the Nuestro Futuro Foundation.

Civil Beat’s community health coverage is supported by the Atherton Family Foundation, Swayne Family Fund of Hawaii Community Foundation, the Cooke Foundation and Papa Ola Lokahi.