Land board to consider proposals for Uncle Billy’s, Country Club sites

Uncle Billy’s Hilo Bay Hotel and the Country Club Condo Hotel could be replaced by Hilton franchises under redevelopment proposals submitted to the state Department of Land and Natural Resources.

Last year, the DLNR opened applications for long-term lease agreements for the former Uncle Billy’s hotel and the former Country Club hotel, two ailing Banyan Drive properties long overdue for renovation or demolition.

Since then, the DLNR has received four proposals for the two properties: one for Uncle Billy’s and three for the Country Club.

Hilo Rep. Chris Todd, who has long advocated for redevelopment of the Banyan Drive area, said he is concerned about how few proposals were submitted.

“I don’t want to see the state pigeonholed into a specific kind of plan,” Todd said Wednesday, although he admitted that, “Eventually, we do have to proceed one way or the other.”

The lone proposal for Uncle Billy’s — which closed in 2017 after 50 years of business — was submitted by Tower Development Inc., which also is the managing partner for WHR LLC, the current owner of the Grand Naniloa Hotel on Banyan Drive.

Tower Development’s proposal for the Uncle Billy’s property, submitted last November, would demolish at least one-third of the existing buildings on the site in order to build a Hampton Inn & Suites in partnership with Hilton Hotels and Resorts. The hotel would include 100 to 125 rooms and would employ between 30 and 50 workers.

The hotel also would include 214 parking spots, although that part of the proposal is contingent upon subleasing a portion of Tower Development’s nearby golf course property to the Uncle Billy’s site. Earlier this year, Tower Development sought to remove the golf course from its lease in an effort to reduce rent costs.

Under this proposal, Tower Development would pay to the state $10,000 in annual rent for 10 years, then $20,000 annually between years 11-20, and $30,000 annually between years 21-30.

The total plan to develop the hotel would cost between $33 million and $38 million, according to the proposal, and would take about four years to complete.

Tower Development also submitted a proposal for the Country Club Condos. That plan would gut and renovate the building’s interiors to build a Home2 Suites location, also in partnership with Hilton. The new hotel would include 100 to 125 rooms and 286 parking spaces contingent on the golf course sublease.

Tower’s proposed minimum annual rent for the first decade is $75,000. The full plan to develop the hotel is estimated at $20.4 million and would take about 2.5 years to complete.

Even though two of the four proposals involve a multinational hotel chain, Todd said he is not overly concerned about Banyan Drive being overrun with large off-island businesses.

“One of my big priorities as a legislator is making sure the benefits of tourism are being reaped by locals,” Todd said. “A lot of the profits of tourism are being generated by these national or international businesses … but Tower Development is local.

“And at some point, you kind of can’t look a gift horse in the mouth,” Todd continued.

Two other proposals for the Country Club location also have been submitted. The first, submitted by MacDonald Ladd Development LLC in Tacoma, Wash., proposes that the building be converted into 65 units for low-income housing for seniors.

The other was submitted by Pagoda Hilo Bay LLC with the intention of extending the Pagoda Hotel brand from Honolulu to Hilo.

Under this proposal, the Country Club would be converted into a 152-unit Pagoda Hotel for a 65-year lease, more than double the length of any of the other lease proposals.

Following the receipt of the four proposals last year, the DLNR appointed a committee to evaluate the four and make a recommendation to the Board of Land and Natural Resources.

According to a DLNR press release Wednesday: “The committee’s recommendation to approve Tower Development Inc. as the lessee/developer for both properties could go before the BLNR as early as its Sept. 24 meeting.”

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.