Naniloa hotel deal hits snags
The likely buyers are "disappointed"
there are so many hurdles
A partner in a mainland investment group says he is disappointed with the additional steps that must be taken to get an extended land lease that is needed before the group can buy the Hawaii Naniloa Resort in Hilo.
CH & Associates has pledged that it if it acquires the 391-room hotel on state property on Banyan Drive, it will spend at least $5 million on building renovations, pay off the hotel's debts and affiliate with the Sheraton chain, said CH & Associates partner John Conway.
But before it makes that kind of investment, the group wants a 55-year lease from the state. The land lease with the current hotel owner, Middlewood Capital Inc., expires in 2015.
Yesterday, the state Board of Land & Natural Resources asked CH & Associates to go into arbitration over its differences with the state on proposed land rent terms and the market value of the hotel buildings.
If those differences can be resolved, CH & Associates still could face competition for the land lease if there are other interested parties.
CH & Associates had hoped the state would give it a break on rent in recognition of the state's desire to upgrade hotels on state land in Hilo.
William Takaba, Hawaii County director of finance, told the Land Board that the county "supports their plan to bring a first-class hotel back to the Hilo side."