"West Hawaiʻi residents have been asking for better access to healthcare for decades," Representative Nicole Lowen said in a release from the Hawaiʻi House Democrats welcoming Governor Josh Green's release of $50 million for a medical campus in Kona. Her district runs through Kailua-Kona, Honokōhau and Kalaoa, so the project would sit in it.
That money isn't going to Queen's hospital itself. It's for the Outpatient Care Center, a separate building that state agencies and Queen's are developing together next to the planned hospital. The services that state budget language lists for it are the everyday kind: walk-in care, lab work, X-rays and scans, primary care and specialist offices.
Two buildings on one campus near Honokōhau
Queen's describes the full project as a planned 32-acre campus near Honokōhau in Kailua-Kona. It has three parts: a Queen's-owned acute care hospital, the Outpatient Care Center (OCC) next to it, and about 150 workforce housing units on the upper campus. In a March 2025 project update, Queen's President and CEO Jason Chang gave the location of the hospital parcel: 31.15 acres on the mauka side of Queen Kaʻahumanu Highway, between Kimo Drive and Honokōhau Street.
Who pays for and runs each building is set up differently:
| Acute care hospital | Outpatient Care Center | |
|---|---|---|
| Owner and operator | Queen's | Public-private partnership of Kona Community Hospital, Aliʻi Health Center and the State of Hawaiʻi |
| Land | Queen's Lanihau parcel | Three to five acres donated by Queen's to the state's Hawaiʻi Health Systems Corporation, West Hawaiʻi Region |
| Size | About 68 beds, current planning target | 50,000-plus square feet |
| Price tag cited by Queen's | Part of an estimated $680 million for the whole West Hawaiʻi project | $100 million |
| State money released so far | None described | $50 million initial funding |
The $50 million covers half of the OCC's own $100 million cost, and it's a small slice of the roughly $680 million total that Queen's estimates for the whole project. When Queen's and HHSC announced their partnership in December 2025, they described $50 million as the initial request for OCC planning, design and site work, and said more funding requests would follow as the project moved along. According to the House Democrats' release, the money released this fall goes to design and construction of site preparation and infrastructure. In other words, it pays for the groundwork that comes before the building itself.
What the outpatient building is written to hold
The clearest description of the OCC's contents is in the state budget itself. HB1800 HD1, the 2026 supplemental budget bill, has a $50 million capital line item titled "West Hawaii Medical Office Building." It covers site preparation, design and permitted plans for a building with:
- Provider offices and exam rooms
- Walk-in and urgent care
- Lab, radiology and other ancillary services
- Primary care
- Multispecialty office space
The December 2025 partnership announcement called the OCC a one-stop hub for primary and specialty care, with clinical services and office space under one roof.
The hospital next door is planned for a different level of care. A Kaufman Hall study that Queen's commissioned found the new hospital would need 64 to 80 beds, 12 to 14 emergency bays and four operating rooms. Chang also described a flexible room with specialized imaging for cardiac catheterizations, interventional procedures and vascular procedures. Queen's project overview lists emergency services, general surgery, cardiology, neurology, advanced imaging, labor and delivery, and urology as planned clinical services for the West Hawaiʻi hospital. That list belongs to the hospital, not the outpatient center, and Queen's notes beneath it that services are still being evaluated and refined as planning continues.
Put the two lists side by side and you get a rough sense of who uses which building. The hospital handles admissions, surgery and cardiac procedures. The OCC is where the walk-in visit, the blood draw and the specialist follow-up are planned to happen. Rep. Kirstin Kahaloa, whose district covers Holualoa, Keauhou and Kailua-Kona, put it this way in the House Democrats' release: "Every West Hawaiʻi resident has a story about the challenges of finding a doctor, getting an appointment, or needing to fly to see a specialist." The outpatient building is the part of the plan aimed at those problems.
The hurdles that stall Kona projects are mostly cleared
Anyone who has followed construction along the Queen Kaʻahumanu corridor knows water is often what holds a project up. Chang said as much in his March 2025 update. Queen's bought just under 300 water credits in February 2025, which it estimates is enough for the complete complex. He wrote that "Access to water has limited many developments throughout Kona, so we have cleared this major hurdle."
Zoning went quickly too. Queen's rezoned the Lanihau parcel in January 2025 after presenting to the Hilo and Kona zoning committees, and Chang said the proposal drew few questions and no resistance. In September 2026, Queen's project overview listed more completed or ongoing steps: Ferraro Choi and HOK chosen as project architects, archaeological review completed, water credits secured, wastewater infrastructure work underway with Lanihau Properties, and site planning and early design in progress. The same overview says $30 million has been committed to finish design and construction documents, and that more funding will come in phases in future fiscal years.
The big county step still ahead is the Planned Unit Development review. In March 2025, Chang explained that the campus plan goes to the county as part of the PUD process, which shows officials how the hospital would affect traffic, noise and utilities. "Once the PUD is approved," he wrote, "we can apply for permits to break ground." For people who drive Kimo Drive or Honokōhau Street every day, the PUD review is where traffic effects are laid out for the county.
The calendar Queen's has published
The September 2026 overview gives these planning targets for the West Hawaiʻi project. Queen's says they are subject to ongoing planning, regulatory review and project development:
- 2026: scope, planning and schematic design
- 2027: construction documents
- 2028: construction start
- 2031: estimated opening, with about 68 beds
That makes the $50 million released in October 2026 money for the early years on that list: design, site preparation and infrastructure. It won't put a building on the site this year or next. It funds the work that has to be done before anything can be built.
Kona Community Hospital stays part of the plan
The new campus is designed to work with Kona Community Hospital in Kealakekua. In July 2025, Chang reported that Queen's University Medical Group had begun rotating surgeons to Kona Community Hospital. He called it a way to start working with the Aliʻi Medical Group and to give Hawaiʻi Island local access to Queen's providers. HHSC CEO Clayton McGhan pointed to the same rotations when the partnership was announced in December 2025.
Chang's March 2025 update also covered the existing hospital's long-term role. Working from Kaufman Hall's utilization data by zip code and specialty, he wrote that "South Kona would benefit from keeping the Emergency Department open and possibly some observation beds for stays less than 48 hours." That is Queen's reading of the data, and planning with Kona Community Hospital is still going on. Queen's describes the result as a regional health system with three campuses: the new Kona hospital, Kona Community Hospital and Queen's North Hawaiʻi Community Hospital in Kamuela.
For North Kona, that means the first building with state money behind it is a 50,000-plus-square-foot outpatient center a few minutes mauka of Queen Kaʻahumanu Highway near Honokōhau, written into the state budget for urgent care, lab and radiology, primary care and specialist offices, on a campus Queen's targets to open in 2031.
Over time, a new medical campus between Kimo Drive and Honokōhau Street will change what's nearby for homes across North Kona. Doug and Kendra Powell keep up with projects like this one so clients get a frank, local read on what's coming to their part of the island. If you'd like to know what your North Kona home is worth as the Honokōhau campus moves through design, Hawai'i Estates can help you start with a clear number. Get your Instant Home Valuation.
