HILO — The state Department of Land and Natural Resources will host a meeting Friday on the future of more than 80 commercial and industrial parcels in Hilo, but there is one site in particular that is expected to garner a lot of attention.
Uncle Billy’s Hilo Bay Hotel, one of three Banyan Drive sites with expiring leases the state is looking at redeveloping, will close Feb. 1 after about a half century in business.
News of the landmark kamaaina business’ upcoming closure broke last week and is surely to become a focus of the meeting, which will address state-owned properties on Banyan Drive and in the Kanoelehua Industrial Area. Lawmakers who are planning to attend say they will urge DLNR to move quickly to put the property back to use.
“We cannot afford businesses like Uncle Billy’s going under,” said state Sen. Gil Kahele (D-Hilo). “We need to find a direction, decide where we are going and make it happen.”
State Sen. Lorraine Inouye said she sees DLNR as being responsible for the closure, and she was disappointed the agency didn’t start addressing the expiring Banyan Drive leases, which also include Country Club Condos and Reeds Bay Resort Hotel, sooner.
“They don’t get the message,” said Inouye (D-Hilo, Waimea, Waikoloa), who has a background in the hospitality industry. “They are destroying the ability of businesses to survive.”
Aaron Whiting, manager of the 145-room hotel, said the lease situation created uncertainty for the business that made it difficult to plan ahead, but there also were “internal issues” that contributed to the decision.
“The lease issue wasn’t the only thing,” he said, declining to elaborate.
Land leases for the hotel, and the two other properties, which have been converted mostly or entirely into condominiums, were set to expire March 14, followed by a month-to-month revocable permit. They previously received a one-year extension.
While the properties aren’t contiguous, DLNR is considering placing them under one master lease. That idea will be discussed at the meeting, held at Aupuni Center in Hilo. The meeting will begin at 9 a.m. with discussions on KIA, which include consolidating parcels or switching to a master lease concept, followed by talks on Banyan Drive at 1 p.m.
Kahele said he would like to the see the county get involved in a partnership with the state over Banyan Drive management and planning. He referenced Mauna Kea Recreation Area, owned by the state but managed by the county, as an example.
“We can do the same thing on Banyan,” Kahele said. “We need to work together.”
Mayor Billy Kenoi told the Japanese Chamber of Commerce and Industry of Hawaii in March that he was a couple of weeks away from announcing a new management arrangement with the state for Banyan Drive, but he has yet to provide details or discuss the matter again. Kenoi did not return a request for comment Monday.
Gordon Heit, DLNR land manager for Hawaii Island, said the state would consider a partnership with the county, but that is not an option that will be part of Friday’s presentation.
The meeting will follow the release of several studies related to Banyan Drive and Kanoelehua Industrial Area, including economic forecasts and tourism market studies. The documents can be found at http://tinyurl.com/dlnrstudies.
Heit said the agency is trying to take a long-term view of the properties.
“We’re hoping the public forum gives us more insight and feedback from the community,” he said.
It remains unclear how long that process will take.
Chris Yuen, a Hawaii Island resident on the state Board of Land and Natural Resources, said he will attend the Friday meeting, but is reserving comment on the process or future of Banyan Drive for now.
“I have a lot of thoughts, but I think it’s premature to really say anything right now,” he said. “This is something a lot of people are working on.”
Heit said Uncle Billy’s pays $35,800 a year for its leases.
After the business closes, the hotel will become the property of the state, which will be responsible for securing the premises.
Email Tom Callis at tcallis@hawaiitribune-herald.com.