HILO — Uncle Billy’s Hilo Bay Hotel — a fixture on Banyan Drive for half a century — will close Feb. 1.
Aaron Whiting, hotel manager and grandson of founder William J. Kimi Jr., said the family exhausted its options and more as it sought to keep the aging hotel running as it faces the expiration of its state land leases.
“We have spent more than simply money in attorney’s fees, appraisal evaluations, business plans and, not to mention, keeping an aging property in service beyond its functional capacity; we have exhausted our emotional reserves,” he said in a written statement. “It seemed unimaginable that our little iconic Hawaiian hotel that so reflects the heart and soul of the Hilo community would one day not exist.”
Whiting told the Tribune-Herald that the 37 employees of the hotel and general store were told Monday during a meeting that was filled with “surprise and sadness.”
The hotel suspended taking reservations last fall and will reimburse guests who already had made reservations for after the closure date.
“The search for alternate accommodations will begin immediately with guests being notified of the change as soon as possible,” the hotel’s statement said.
According to the Department of Land and Natural Resources, the hotel’s first building was completed in 1966, followed by additional construction in 1968 and 1970.
A tourism market study for Banyan Drive estimated the hotel’s building and land value at $5.79 million.
The 145-room hotel’s land leases are set to expire in March, followed by a month-to-month revocable permit. The lease amount wasn’t immediately available.
DLNR is in the process of drafting a redevelopment plan for Uncle Billy’s, the Country Club Condos and Reed’s Bay Hotel and is not seeking new leases for the properties at this time.
An engineering report completed in 2014 estimated the buildings had five to 10 years of useful life.
The closing date will give it time to hand the property back to DLNR, the hotel said.
Gordon Heit, DLNR’s Hawaii Island land manager, said he also was surprised to hear the news.
“My assumption was they were going to run it through to after at least Merrie Monarch,” he said.
Heit said the closure would accelerate DLNR’s efforts to create a redevelopment plan for the property, which likely will sit empty until a lease is granted to a new owner or developer. For now, though, there is no timeline for when a new tenant will be sought.
Uncle Billy’s opened during a hotel construction boom in Hilo that would see the Waiakea Peninsula become clustered with new lodgings. The hotel industry there has since struggled following the growth of tourism on the Kona side, with several properties turned into condominiums.
According to DLNR’s tourism market study, Hilo had 526,435 visitors in 2012, about half the amount that went to Kona.
The hotel has been popular with kama‘aina and remained a family business.
Sandra Yokomizo, company president and daughter of Kimi, said “nobody will be able to replace the people who have made this hotel so special over the years.”
“Uncle Billy’s has always been about the people that make up our community,” she said in the statement. “Sharing our lives with those from other places near and far is what made Uncle Billy’s Hilo Bay Hotel a favorite for kama‘aina and visitors alike.”
Kimi, who started the business to help provide local jobs, built much of it himself, the hotel said in the statement.
“This is where it all started for my family,” Kimi, 93, was quoted as saying. “I just wanted to have a business where my kids could work and build their families without having to leave home.”
Hotel operations will continue through Jan. 31. A liquidation sale will begin Feb. 5.
No date has been set for when the general store will close.
The hotel’s Kailua-Kona location will remain in operation.
Email Tom Callis at tcallis@hawaiitribune-herald.com.