COURTESY HTH CORP.
HTH Corp.'s sale of its flagship Big Island property, King Kamehameha's Kona Beach Hotel, is slated to close in June. CLICK FOR LARGE
Investors to buy King Kamehameha hotel
They partnered with a California company to buy and renovate the Kona Beach hotel
Local hotelier HTH Corp. is selling its flagship Big Island property, King Kamehameha's Kona Beach Hotel, to a California-based hotel management company with deep enough pockets to fund renovations.
Invest West Financial/Pacifica Hotel Co. has partnered with a consortium of Hawaii investors to buy the oceanfront hotel for an undisclosed amount.
It will be the first Hawaii hotel for Pacifica, which owns and manages properties in California and Florida coastal areas.
The deal is slated to close in June, with renovations to follow within a year. The company said it will keep the hotel open during renovations. It said it plans to retain the hotel's 178 employees.
HTH, which also owns the Pagoda Hotel and the Pacific Beach Hotel, says it isn't planning to sell those.
HTH Corp. said yesterday it will sell the King Kamehameha's Kona Beach Hotel for an undisclosed price to a California-based hotel company and a group of local investors.
Invest West Financial/Pacifica Hotel Co., which owns and manages hotels in California and Florida coastal areas and is working on a condominium project in Hilo, has partnered with a consortium of Hawaii investors to buy the oceanfront Kailua-Kona hotel.
The deal, scheduled to close in June, is intended to bring new life to one of Hawaii's most strategically located oceanfront properties.
Pacifica will begin renovating the property within a year of the purchase, said Lori Keller, vice president of sales and marketing for Pacifica. While the scope of the hotel renovations has yet to be determined, Pacifica will keep the property open during the repositioning, she said.
"We won't close down for renovations. However, we could close a floor, a tower or a section of the hotel," Keller said.
Pacifica's parent company, Invest West Financial Corp., is a 37-year-old real estate investment and management firm, which owns hotel, commercial and residential real estate properties. The King Kamehameha Kona Beach Hotel will be the first Hawaii hotel venture for Pacifica.
"We are tremendously excited to be acquiring this unique and culturally rich property," said Pacifica President Mike Barnard. "Pacifica has a long history of working closely with the communities in which we operate and of adding value to the hotels we own and manage."
Pacifica also expects to work closely with the hotel union to ensure that all 178 employees make a smooth transition to the new ownership, Keller said.
Barnard added, "We intend to continue our positive and cooperative approach here, by honoring existing employee union agreements and by enhancing and upgrading the hotel while respecting the heritage of the site."
The property's strategic oceanfront location as well as its potential for redevelopment made it attractive to the new owners, said Lori Keller, vice president of sales and marketing for Pacifica.
"We have a history of taking over hotels that are slightly underperforming in the market and looking at how we can enhance them in terms of renovating them or working on new relationships," Keller said, adding that the company seldom flips its acquisitions, and is likely to retain the Kona property because of its oceanfront location.
Timothy John Young, president of Blackpoint Capital Advisors LLC and Joseph G. Leoni Jr., a long-time owner and operator of Hawaii real estate, along with real estate investors Patrick Beach and Russell Geyser will led the local investor team.
"Our local partnership was seeking a partner that understood Hawaii, shared our vision of the enormous potential for reinvigorating the King Kamehameha's Kona Beach Hotel, and possessed the experience and expertise to ensure our vision would be realized," Young said. "In Pacifica, we not only found a partner that is truly excited about Hawaii and the asset, but shall also bring a longstanding track record of success and a new operating platform to our market."
The 460-room King Kamehameha Kona Beach Hotel, which became part of the HTH chain when late owner Herbert T. Hayashi acquired it in 1991, is not expected to change its name post sale.
"We are excited about Pacifica Hotels as their renovation plans will benefit our loyal kamaaina customers and return visitors to our beautiful island," said Robert "Mick" Minicola, HTH Corporation regional vice president. "The improvements will enhance this landmark location."
The Hayashi family will continue its ownership interests in the Pagoda Hotel and the Pacific Beach Hotel. The latter is managed by Outrigger Enterprises Group.
While Pacifica is open to acquiring other Hawaii properties, Keller said that the company has not identified other island deals.
"There are high barriers to entry in Hawaii and the cost of doing business is high," she said, adding that the company is not negotiating to buy either of the other two Hayashi family properties.