HONOLULU (KHON2) — It could be back to the drawing board for the rebuilding of Kauai’s Coco Palms Resort. The state is investigating possible violations by the developer, which could lead to the company losing its lease.

Meanwhile, the county is now making plans to take over the property.

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Coco Palms has been an eyesore after getting battered by Hurricane Iniki 31 years ago. The owner of the property, Utah based Reef Capital Partners has been in the process of rebuilding when the State ordered the company to stop work last month because of possible permit violations.

Those violations were brought up on Wednesday, May 10 at the Kauai Council hearing. Among them was allegedly cutting down dozens of coconut trees unique to that area.

“The department gave no permission. It is our understanding there was a fire lane that was cleared on that property which removed approximately 77 coconut trees,” said Dawn Chang, director of the Department of Land and Natural Resources.

Chang said the company has also re-assigned the lease twice without permission and failed to maintain the property. She said the company has 60 days to respond while the State investigates. Council members asked if the violations could revoke the company’s lease and permits.

“All I can tell you is that it is a basis for termination or cancellation,” said Chang.

Some residents have protested the rebuilding of the iconic hotel because of the traffic it can cause. During the hearing Council Chair Mel Rapozo said he now wants the county to take over the property.

“We’re gonna ask staff to set up an executive session with our county attorney to see how we can start the process of eminent domain and take that land,” Rapoza said to a room of applause.

Rapozo added though that taking over the property comes at a cost to taxpayers.

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“With condemnation comes the real market value that we gotta pay. I’m committed to finding that money. We can put some CIP projects on the side for a little while we can tap our reserves. I believe if this is what this community wants we can get it done,” he said.

We’ve reached out to the company and are still waiting for a response.