On the Big Island, there's a great divide between the west and east coast real estate markets of Kohala, where median condominium prices are around $700,000, and Hilo, where most condos run around $100,000.

Kohala is home to eight luxury resorts, including the Four Seasons Hualalai, and seven championship golf courses. Hilo visitor accommodations are more the discount variety such as Uncle Billy's, and the main golf attraction is the municipal course.

But a local developer believes there's an opportunity to build and sell a few luxury vacation condos in the more-rural-than-tony south Hilo area of Keaukaha.

Developer Gil Barden of Hilo-based Pacific Island Investments LLC recently began building a model unit for a planned 12-unit luxury townhome complex where prices would range from $600,000 to $685,000.

"There's a gap," he said. "There's really no luxury condos in Hilo. There's a lot of wealth in Hilo, and a lot of people who want (higher-end homes).

"We thought we could fill a niche."

The project, dubbed Coco Palms at Keaukaha, has been on the market since last month, and so far has seven nonbinding reservations from prospective buyers.

Barden said the interest has been good, though many who have seen the project plans are surprised by what he is attempting.

ECLECTIC NEIGHBORS

Keaukaha is a community with a handful of older oceanfront residential estates and a few oceanfront vacation condos dating back a few decades, but is mostly a community of modest homes, including a large Hawaiian Home Lands subdivision.

The 1.4-acre Coco Palms site is bordered by largely undeveloped land toward the ocean, the Hawaiian homestead subdivision, an apartment building and Arnott's Lodge, a hotel catering to international travelers on a budget.

Barden's aim is to create something of an oasis on the site, which includes a roughly half-acre anchialine pond believed to have been built in the late 1920s by a Portuguese farmer who raised snapper.

Coco Palms units are designed as one- and two-story townhomes surrounding the fishpond, which Barden said will be restored and maintained by a private contractor who maintains other ponds in Keaukaha.

Barden said it hasn't been determined what kind of fish would be stocked in the pond and what kind of harvesting rules would apply to unit owners, but the fishpond is not intended for commercial use.

Homeowners' association fees, which are projected at about $350 to $400 a month, would help maintain the pond and other common elements, which include 40 or so coconut trees on the property.

Because the land is in a flood zone, the townhomes will be on stilts, which also will provide ocean views.

Other unit features include an elevator to each townhome, koa cabinets and thatch roofing.

Because the property is zoned for resort use, owners could rent out their units as vacation rentals.

RAIN AND CHICKENS

But some observers question how well the project fits with the surrounding environment.

Local real estate market researcher Ricky Cassiday, who tracks Neighbor Island resort home sales, said the design of Coco Palms is attractive, but that Hilo's rainy weather will dampen its appeal.

Patrick Kahawaiola'a, president of the Keaukaha Community Association, said he's concerned that buyers at Barden's project may complain about chickens or the upkeep of some neighboring homes.

"The question is still open as to whether or not it will have some impact in our Hawaiian community," Kahawaiola'a said, adding that he's not opposed to residential development in the area and that he likes that the property and pond will be improved.

Barden's project may be out of character with much of the community, but he said it's not out of place, given that also close by is the multimillion-dollar former estate of Hilo businessman and state Sen. William Hardy "Doc" Hill.

The Coco Palms site was once occupied by three homes, one of which was destroyed during the 1946 tsunami that hit Hilo, according to a historical study of the property.

Barden took control of the property in 2006 after partnering with another developer, Ronald Worsham Smith, who bought the site in mid-2005 for $399,000, according to property records. Barden said Smith planned to develop about 30 homes on the site but needed help.

Barden redesigned the project, which he is developing with Smith and another partner as Koko Palms Keaukaha LLC.

READY TO START

Last year, Barden received necessary permits to move ahead with the plan. Unit sales are being handled by Prudential Orchid Isle Properties. Barden hopes to begin building three units this summer, and expects the model unit started last month to be complete in November.

Despite a slowdown in the local housing market, Barden said he's bullish on Hilo real estate and believes there's room to succeed with a relatively small, unusual project such as the luxury Keaukaha townhomes.

Still, challenges exist — as Barden experienced with a planned moderate-priced Hilo townhome project called Wailuku Village that he attempted to build last year.

The 105-unit Wailuku Village was described as the first major new condo project in Hilo in roughly three decades. Barden had lined up enough reservations to start building — about 40 — but said higher-than-anticipated construction pricing led him to delay the project.

Now, a previously planned 62-unit first phase has been reduced to 15 units that Barden projects he will start building around October.

Wailuku Village prices range from about $230,000 to $400,000.