When the clock on Aloha Tower strikes 2 on the first morning of 2006, Henry Kapono Ka'aihue will be ready to say goodbye to Kapono's.

"We've fulfilled the dream I had for the place," Ka'aihue said of the waterfront restaurant and live-music club he co-founded 4 1/2 years ago. "The first 2 1/2 years were a struggle just trying to find out who we were and how to survive in this market. But finally, we started to come out of that. This year wound up being our best year."

And, ironically, its last.

Kapono's will dim the lights of its picturesque pier-side stage for the last time after a New Year's Eve multi-act concert dubbed "Kapono's Final Hour at the Tower." Ka'aihue and his co-partners decided against renewing Kapono's lease last month after talks with Aloha Tower Marketplace management broke down over the length of the lease. The partners wanted a one-year lease with an option to extend; tower management wanted a five-year commitment.

Ka'aihue said the most difficult part of his decision to shutter Kapono's was knowing he'd have to let the staff go. Once the decision was made to close, however, he said, "it felt right."

Post-Kapono's, the singer/songwriter/musician will finish recording his first CD of original material since 2000's "Evolution of Poi."

"I've been working on it in between (running) Kapono's," said Ka'aihue of the CD, currently titled "The Wild Hawaiian." "It's very different and something I've always wanted to do. It'll probably revolutionize the way Hawaiian music is played and listened to.

"It's definitely very powerful and very Hawaiian. I call it alternative Hawaiian music."

Slated for an early summer release, the recording will also be Ka'aihue's first without any English lyrics.

"It's all Hawaiian," Ka'aihue said proudly, before pausing and offering some caution. "It really rocks, though." He laughed hard.

Over its brief existence, Kapono's prided itself as a haven for live music, hosting diverse concerts by national and international acts (Ozomatli, Lifehouse, Alien Ant Farm) and giving dozens of local musicians of all genres one of the best outdoor stages in town to play.

"We've had such great moments ... and that's what I'm going to miss," said Ka'aihue. "That stage has got a lot of magic on it."

After combing through those Kapono's moments, Ka'aihue shared his five most memorable with us.

1. OPENING NIGHT (JUNE 8, 2001)

(Kapono's grand opening was a multi-hour, multi-act concert streamed live over the Web. Musicians included Kapono, Willie K, Amy Hanaiali'i Gilliom, Keali'i Reichel, Robi Kahakalau and Barry Flanagan.)

"At the time, that was an innovative way to open up. We got more than a million hits from all over the world that day. People were e-mailing us about how cool it was to watch something like that going on in Hawai'i. We had almost 20 acts from noon until 2 a.m. ... all of the top acts. It showed me how much support I was going to get from the musicians as well as from the public. It was a really long day, an eye opener and really gave us a good start."

2. CECILIO & KAPONO'S "30 YEARS OF FRIENDS" CONCERTS (JUNE 6-8, 2003)

(To celebrate the 30th year of their musical partnership, Kapono and Cecilio Rodriguez hosted a weekend of concerts and fireworks at Kapono's, filmed for a DVD release.)

"The concerts re-established C&K again, at Kapono's. It brought Cee and I a little more closer together in a lot of ways. A lot of people have thought that we don't like each other. And that's really not true. We're just so different. We have our own little things that we like to do. ... But when we play music, that's what we really like doing together. We've been doing a concert every year since the 30th (anniversary) shows. (Those nights) also re-established us as musicians, as friends and as human beings."

3. OZOMATLI'S KAPONO'S CONCERTS (OCT. 30, 2004; OCT. 28, 2005)

(The Los Angeles-based multi-genre, multi-cultural fusion band and Honolulu concert favorite had played here several times before — one of its first local shows was at Kapono's precursor, the Pier Bar, in August 2000. But the band, looking to create an annual reason to play here, chose Kapono's for Halloween shows in 2004 and 2005.)

"They just really rocked the place every time ... and brought this really happy spirit to the place. People were just glowing when they were leaving. And they're just real nice guys — real musicians I've become really good friends with. ... They did other shows at World Cafe and Pipeline (Cafe). But they were always calling me and saying, 'We want to come back to your place.' They really loved the outdoor stage and the outdoor vibe. ... They've been my favorite group ever since."

4. "KOKUA FOR KATRINA" BENEFIT CONCERT (SEPT. 18, 2005)

(Partially broadcast live over eight Honolulu television stations — including all four local network affiliates — this multi-hour, multi-act concert organized, in part, by Kapono's raised more than $100,000 for victims of Hurricane Katrina.)

"An amazing day! Everyone — our staff, musicians, camera people, production staff, producers, directors and everyone behind the scenes — donated their time and did a really awesome job. We did a two-hour TV special and it just went like clockwork. It said a lot about the people of Hawai'i. It said a lot for Kapono's. Considering that two weeks had passed since Hurricane Katrina, a lot of people were putting on events to raise money, and people were pretty tapped out financially, the amount we raised was great. People were still willing to give."

5. "KAPONO'S FINAL HOUR AT THE TOWER" (TOMORROW)

(Kapono's will close for good at 2 a.m. Jan. 1, 2006, after this live bash so far scheduled to feature Kapono, Ledward Ka'apana, Inoa'ole, Speed Limit and whoever else drops by and wants to jam. See details on this page.)

"I think it's going to be the biggest thing we've ever done, and I know it's just going to be so much fun. I'm going to do a two-hour set. I'm bringing in the new year. I wrote a new song for the event called 'We Came, We Rocked, We Had A Good Time.' It's real catchy and I think people will get right into it and start singing it. We're going to record the night and do a DVD so we'll have something to take with us into the new year and share with people to let them know where we've been, what people missed and the good times we've had. ... There'll be the fireworks, too. It'll be a big celebration and a good way to go out. For us, it'll be like going out on top."

Reach Derek Paiva at dpaiva@honoluluadvertiser.com.