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Left in limbo


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POSTED: Saturday, May 02, 2009

The fate of more than 100 employees working for Hawaii Hotel Management at the Ilikai is up in the air as the foreclosed properties are auctioned to a new owner.

The state Department of Labor received notice at the end of March that Hawaii Hotel Management LLC and Anekona Islander LLC, both run by Big Island developer Brian Anderson, would cease hotel operations and lay off 142 employees on June 3.

What happens next is up to the new owner, according to attorney George Van Buren, the appointed receiver for Anderson's foreclosed properties.

New York-based lender iStar FM Loans LLC was the sole bidder for Anderson's foreclosed properties at auctions in April, offering $35 million for 203 residential condo units and $15 million for 16 commercial units.

A confirmation hearing is set for May 21 before Judge Karen Blondin in state Circuit Court.

At that time, Van Buren says, other bidders can come forth with an offer 5 percent higher than iStar's, which would reopen the bidding process.

Anekona continues to manage the Ilikai, according to Van Buren, and expects to convey the properties to the new owner on June 3.

Unite Here Local 5, meanwhile, filed a complaint in March with the National Labor Relations Board alleging that Van Buren has failed to bargain collectively with it, as well as to provide information about potential buyers.

“;Our concern is for the future of the Ilikai,”; said Local 5 spokesman Cade Watanabe. “;We want to ensure that iStar has a real interest in restoring the Ilikai and remaining a quality employer in our community.”;

Many Ilikai workers, he said, have been placed on call even though they still remain on the payroll, meaning they are not getting paid on a regular basis.

The union's contract with the hotel expires in 2010, he said, and includes a successorship clause for any new potential owner.

Van Buren declined to comment on the complaint.

Anderson's Anekona LLC bought 343 units at the Ilikai in July 2006 for $218 million with plans to reposition it as an upscale condominium hotel, before encountering problems and going into foreclosure.

The Ilikai, an iconic Waikiki property immortalized by “;Hawaii Five-O,”; has 1,009 privately owned units, including the 203 units and 16 commercial units previously owned by Anderson and run by his hotel management company.

The commercial units include the front desk, offices, meeting rooms and parking.

Owners of the remaining Ilikai condo units have their own property managers handling short-term rentals, while a portion are owned by time-share companies, which prompted a recent lawsuit.

Robert Currie, an Ilikai condo owner, filed suit against SV-Hawaii LP and Shell Vacations in April, alleging that operating time shares violates the property's governing documents.

William Lawrence, a longtime owner-occupant at the Ilikai and former condo association board member, said most owners wish to see the Ilikai the way it was before Anderson came in with his redevelopment plans.

The 360-room Yacht Harbor Tower, which Anderson sold to San Diego-based eRealty in 2006, remains empty and dilapidated.

“;Anderson has ruined the whole complex,”; he said. “;There's no restaurant, no bar and no room service. It's a complicated mess now.”;