Soil tests flagged live anthrax markers. The developer allegedly knew for years
A class action alleges Starwood Capital affiliates concealed anthrax burial sites beneath a Kauai golf course.
Thousands of homeowners on Kauai's North Shore are suing affiliates of Starwood Capital Group, alleging the private equity firm acquired a deed-restricted golf course, pushed to develop it, and concealed century-old anthrax burial grounds underneath.
The lawsuit was filed on September 24, 2026, in Hawaii state court by the trustees of a family trust, on behalf of a proposed class of approximately 3,000 property owners in the Princeville at Hanalei community - a master-planned development built around a 27-hole golf course and dedicated open green space. The case has since been removed to the US District Court for the District of Hawaii. The defendants include five Starwood-affiliated entities, the community's homeowners association, and five current and former association board members.
Starwood Capital Group is a Miami Beach-based private equity firm founded in 1991 that manages approximately $130 billion in assets globally. Its affiliate, SOF-XI Kauai PV Golf, L.P., acquired the eight parcels making up the Makai Golf Course in November 2018, according to the filing. A related Starwood entity holds the adjacent hotel property, listed in the suit as 1 Hotel Hanalei Bay.
The dead cattle under the fairway
The lawsuit's backstory reaches more than a century. In 1917, a lethal anthrax outbreak swept through livestock on the Princeville Ranch, killing up to 500 cattle, horses, and mules, according to the filing. The infected carcasses were buried in shallow graves across pastures that later became the golf course's Woods Course. Silver oak trees and rock piles were used to mark the sites.
That history was documented early. The filing cites a 1975 public offering statement from the original developer, Eagle County Development Corporation, disclosing the epidemic, the burial locations, and the markers. A 1979 Hawaii Department of Health memorandum, also cited in the suit, directed that all marked burial sites "must be left entirely undisturbed during grading or land clearing operations." The golf course architect designed the Woods Course to avoid those areas entirely, the lawsuit says, because the original developer told him not to dig there.
What the homeowners bought into
The Princeville community was built around promises of protected space. In 1971, the original developer recorded restrictive covenants with a 55-year term. The following year, it recorded an Open Space Dedication restricting the golf course land to "golf course and ancillary recreational uses" - a restriction that ran with the land and benefited every property owner in the development, the filing says.
When Starwood's affiliate took title to the golf course parcels in November 2018, the deed explicitly acknowledged those restrictions, according to the lawsuit.
What happened next
From there, the filing alleges, the developer moved to cash in. The suit says the affiliate abandoned golf operations on the Woods Course in August 2021 and applied to the County of Kauai for permits to convert portions of the course into a 50-tent luxury "glamping" complex, complete with an arrival pavilion, dining facilities, and extra parking. The filing also alleges the Starwood entities pursued plans for 40 luxury residential units, a multi-story parking garage bridging the hotel and golf course parcels, and connecting infrastructure.
The county shut down the glamping plan. In December 2021, Kauai County enacted Ordinance 1105, which prohibited developed campgrounds on land outside resort-zoned areas - and that included the Woods Course. The developer withdrew its permit application, the filing says, but continued to maintain that the Open Space Dedication did not bar overnight-accommodation development on the parcels.
The soil tests
What the lawsuit describes next is its most striking claim. On September 11, 2024, the filing says, the developer started soil sampling on the Woods Course "without any advance notice or warning to the community or any State or County departments." Testing between September and October 2024 allegedly found that 14 out of 188 samples came back positive or were flagged as "suspect" for live anthrax markers, alongside what the filing calls an "uncontained bovine bone fragment."
The suit alleges the developer had known about the anthrax grave locations since at least August 2020, when its consultants identified the sites. A December 2020 cultural study confirmed local knowledge of the graves, according to the filing. Despite that, the lawsuit says, the developer "intentionally suppressed their internal environmental findings, omitted the anthrax hazard from their public County planning files," and pressed ahead with development applications.
The association's alleged role
The Princeville at Hanalei Community Association - which took over enforcement authority for the restrictive covenants in 1994, according to the filing - is also named as a defendant. The lawsuit alleges the association failed to enforce the land-use protections, entered undisclosed negotiations with the developer, and intentionally kept both the Open Space Dedication and the 1975 public offering statement out of the resale packets given to incoming property buyers. New homeowners were led to believe the protected green space was permanent, the filing says, while being denied access to the actual covenant terms.
The suit also alleges the developer used "concentrated commercial voting blocks" to install favored directors on the association's board between 2020 and 2025. Five current and former board members are named as individual defendants. The filing accuses them of secretly negotiating away protected green spaces, leaking confidential internal association communications, voting on development measures where their family members held financial interests, withholding covenant disclosures from prospective buyers, and backing soil excavation over the anthrax burial grounds despite health warnings.
An earlier fight, and a court order
This is not the first time the development plans have ended up in court. In June 2021, two Princeville property owners filed a separate lawsuit to block the glamping proposal and challenge how the anthrax risk was being handled. That case went all the way to trial - heard by a judge alone, without a jury.
In July 2025, the court declared that the 1972 Open Space Dedication was legally tied to the community's covenants and would automatically renew in five-year cycles past its original February 2026 expiration, because the developer had never secured a required 75% vote from property owners. In August 2025, the court issued a permanent injunction barring the developer from pursuing residential housing, overnight accommodations, or any ground-disturbing activity without prior court approval.
The current lawsuit alleges the developer tried to work around that injunction in early 2026 by filing a "safety plan" to resume ground-disturbing work, framed as utility repairs and easement maintenance. In May 2026, the court denied the effort, ruling there was not enough evidence to modify the original order.
What they are chasing
The class action raises seven claims: breach of restrictive covenants, unfair and deceptive practices under Hawaii's consumer protection law, private and public nuisance against the Starwood entities, negligence, gross negligence, fraudulent concealment, and breach of fiduciary duty by the individual board members. The homeowners are seeking triple the actual damages under Hawaii law, punitive damages, a permanent injunction blocking any further development or ground disturbance on the golf course parcels, and attorneys' fees.
For real estate professionals, the case is a sharp example of what can unravel when restrictive covenants, environmental disclosure obligations, and community association oversight all break down at once - and how fast property values can move when the gap between what buyers were told and what was actually in the ground becomes public.
None of the allegations in this lawsuit have been tested, and no court has ruled on the merits of any claim.
