Tuesday | May 26, 2015
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Management group change in store for Sheraton

Starwood Hotels and Resorts is taking over management of the Sheraton Kona Resort and Spa at Keauhou Bay, an official recently confirmed.

Keith Vieira, Starwood’s senior vice president of operations for Hawaii and French Polynesia, said Starwood would resume managing the hotel July 9. He said he didn’t anticipate any layoffs with the change. He also contradicted rumors that the hotel would soon be listed for sale.

“They just finished the renovations,” Vieira said. “The hotel has been doing very well the last four months. We’re glad to be back. Fortunately, it’s not a big change for employees.”

Vieira attributed the hotel’s recent financial success to more tourists seeking to visit West Hawaii, as well as an increasingly busy market in Waikiki and Maui. The Sheraton’s location also appeals to younger travelers looking to kayak, hike, run and bike, he said.

A New York-based hedge fund group, Avenue Capital Group bought the Sheraton, with its Hawaii partnership Kona Surf Partners, in 2011 for $26.2 million. In September 2011, Kona Surf Partners switched to Pyramid Hotel Group, out of Boston, to manage the hotel, which then underwent a $16 million facelift.

Changes to the property included upgrades to guest rooms, public areas and meeting spaces. The hotel commissioned Hilo clothing designer Sig Zane to create “culturally appropriate” designs, hotel officials said when the changes were unveiled last year. The hotel added 10 suites, increasing the total number to 24.

In 2009, Koa Hotel LLC, defaulted on a $60 million mortgage for the property. Koa Hotel purchased the former Kona Surf Hotel in 2001. In 2005, they took out an $82 million mortgage from Lehman Brothers, which was represented in the foreclosure proceeding first by LaSalle Bank National Association, and later, following a merger, by Bank of America, according to court documents.