The state Department of Land and Natural Resources took a step toward demolishing the former Uncle Billy’s Hilo Bay Hotel by issuing a “request for interest” for developers Wednesday.
The 145-room hotel, built in the 1960s, 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.
WHR LLC, which owns the adjacent Grand Naniloa Hotel, has held a permit for the property since, but only its small store remains in use.
Ed Bushor, who heads Tower Development, WHR’s managing partner, expressed interest building a new budget hotel on the property. He couldn’t be reached for comment Wednesday afternoon.
DLNR said in a press release that the RFI would be used to gauge interest in redeveloping the site on Banyan Drive, which would occur under a new long-term lease. It notes a developer could receive rent credit to help cover demolition costs.
As for when demolition or redevelopment could take place, the agency said there are too many variables at this point to make that estimate.
A preliminary demolition assessment completed in February estimates that would cost about $8.2 million.
The study also looked at demolition of the Country Club Condos and Reeds Bay Hotel, both of which are nearing the end of their useful life, according to a DLNR assessment, and are operating on revocable permits. It estimates demolition to cost $6.2 million for Country Club Condos and $4.5 million for Reeds Bay.
The properties are located on state land. The 152-room Country Club Condos and 65-unit Reeds Bay buildings are occupied. A similar RFI hasn’t been issued for them.
The document says demolition for each site could take between 40 and 44 months, including design and permitting.
Hawaii County’s Banyan Drive redevelopment agency identified those properties as resort areas in its conceptual plan.
Several bills are moving through the state Legislature that would either help fund a redevelopment master plan or form a new redevelopment agency.
Responses for the RFI are due April 30.
Email Tom Callis at tcallis@hawaiitribune-herald.com.