Hilton’s mold-repair
bill doubles to $40 million

The cost of replacing furniture
and making building reparations
boosts the price tag

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By Tim Ruel
truel@starbulletin.com

The estimated cost to repair mold damage at Hilton Hawaiian Village in Waikiki just keeps growing.

The $20 million tab previously disclosed by the resort's California-based parent company will ultimately reach an estimated $40 million, in part because of the newly disclosed cost of replacing furniture and making building improvements.

Hilton said it will cost $20 million to refurnish rooms in the village's Kalia Tower, and to make improvements to the Kalia and Lagoon towers, where unusual amounts of mold were reported earlier this year.

Hilton, Waikiki's largest resort, started throwing away all the furniture, draperies, carpeting and appliances in the Kalia Tower guest rooms a couple months ago.

The estimated $20 million capital expense will come in addition to $20 million in charges Hilton has taken against its earnings for investigating and removing mold at Hilton Hawaiian Village, said Kathy Shepard, spokeswoman for Hilton Hotels Corp. Hilton disclosed the estimates yesterday in its most recent public financial statement.

Hilton is seeking coverage under its property insurance policy for the costs of remediation, as well as the cost of lost business, the firm said.

Hilton closed all 453 guest rooms in the new $95-million Kalia Tower in July and notified the public of excessive mold in the rooms. The resort expects to reopen the Kalia Tower in the second quarter of 2003. Hilton's time-share Lagoon Tower, where mold was found in a public corridor, has remained open.

Hilton has applied for a $1 million city building permit for work at Kalia Tower that includes a correction to the air-conditioning system. Hilton has retained consulting firm Beall & Associates to do the work.

A Beall representative declined comment yesterday.

Experts are still investigating the causes of the high humidity that led to the Hilton mold.

Beverly Hills-based Hilton, which posted a profit of $166 million last year on $2.12 billion in revenue, owns, manages and franchises about 2,000 properties worldwide.