Another study needed for Uncle Billy’s Hilo Bay Hotel site

  • Grand Naniloa Hotel guests are able to park on the old Uncle Billy's property on Banyan Drive in Hilo. (HOLLYN JOHNSON/Tribune-Herald)
  • Grand Naniloa Hotel guests are able to park on the old Uncle Billy's property on Banyan Drive in Hilo. (HOLLYN JOHNSON/Tribune-Herald)
  • Grand Naniloa Hotel guests are able to park on the old Uncle Billy’s property on Banyan Drive in Hilo. (Hollyn Johnson/Tribune-Herald)

  • Courtesy image An artist rendition of a new 125-room hotel proposed to be built on the former site of Uncle Billy’s Hilo Bay Hotel on Banyan Drive in Hilo.

HILO — Another study will be needed before the former Uncle Billy’s Hilo Bay Hotel site can be redeveloped.

A spokesman for the state Department of Land and Natural Resources said in an email that $1 million or more will be sought from the state Legislature next session to fund the environmental assessment or impact statement regarding demolition and reconstruction.

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The department issued a “request for information” earlier this year regarding interest in redevelopment, and only Tower Development, the managing partner of WHR LLC, which holds the lease for the adjacent Grand Naniloa Hotel on Banyan Drive, responded.

It is proposing a new 125-room hotel, with a project cost of about $38.5 million, according to its response to the RFI from April 30. The company also is offering to provide the county with 2 acres of land for “county park and parking uses” that is currently part of the golf course under the Naniloa lease.

“If approved, funding would be available after July 2019,” said AJ McWhorter, DLNR communications specialist, regarding the study. “It would likely take one to two years after receipt of funding to procure a consultant to conduct the EA/EIS and complete the process. If an interested developer were willing to bear the expense of an EA/EIS, the funding aspect of the process could move more quickly.”

He said Tower hasn’t offered to pay for the study.

Other DLNR-funded reports on the Waiakea Peninsula, which is mostly state land, addressed the potential lifespans for Uncle Billy’s and other properties, cost of demolition and potential future uses.

In its RFI, Tower says it is seeking to partner with a global brand, such as Hilton, Marriott, IHG or Hyatt for the proposed four-story hotel.

“This project is no different than the Grand Naniloa, where we seek to implement design aesthetics from the past, with a modern flare and a strong emphasis on cultural sensitivity, and the historical significance of the site,” the company said.

Ed Bushor, CEO of Tower Development, couldn’t be reached for comment. Ed Olson, who says he is the largest investor in the partnership, referred to Bushor for comment.

Tower says demolition would take six to 12 months at a cost of $5.3 million. Hotel development would take 12 to 18 months.

While only Tower has shown interest in the site, McWhorter said a request for proposals or public auction will need to occur before a long-term lease can be issued for the property. Tower’s response to the RFI proposed a 65-year lease.

Tower is leasing the Uncle Billy’s site under a revocable permit and is responsible for securing the site while it sits vacant. It also uses the property for overflow parking at Naniloa.

The company began renovating the 388-room Naniloa hotel after acquiring the hotel and land lease with its partners in late 2013.

Uncle Billy’s was a 145-room hotel that started in the 1960s.

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It reached the end of its land lease in 2016 and switched hands to Savio ABH Development Company, which operated it as a Pagoda-brand hotel until the state Land Board terminated its revocable permit last year. Tower has been responsible for the property since.

Email Tom Callis at tcallis@hawaiitribune-herald.com.