Marriott in talks with HRI about Laie hotel

The resort operator is being courted to manage what will be a 220-room hotel in Laie

The Mormon church is in discussions with Marriott International Inc. to operate a 220-room hotel it plans to replace the aging Laie Inn on Oahu's North Shore.

Hawaii Reserves Inc., which manages property in Laie affiliated with the Church of Jesus Christ of Latter-day Saints, is seeking permits to tear down the 48-room Laie Inn and build a new hotel adjacent to the Polynesian Cultural Center.

Eric Beaver, a spokesman for Hawaii Reserves, said the church hopes to break ground on the new 220-room facility during the first quarter of 2008. Completion is targeted for 2009.

The hotel will feature a pool, restaurant, retail outlet, banquet facility and a visitor information center focusing on Laie and North Shore activities.

Although few details about the project have been finalized, Beaver confirmed that the organization is talking with Marriott about running it.

"We're in discussions with them to operate a franchise," he said.

Marriott executives could not be reached for comment yesterday, but the organization has established ties to the LDS community. The business school at Brigham Young University is named after entrepreneurs J. Willard and Alice S. Marriott, who used the proceeds from their root beer sales to found the hotel chain.

In addition to the redevelopment of Laie Inn, HRI is also working on the creation of Malaekahana Mauka, a 650-unit affordable housing community, Beaver said.

HRI is still securing financing and entitlements for the Malaekahana Mauka project, Beaver said.

"The community input phase of this project could begin as early as April," he said.

The facility would serve guests to the church-run Polynesian Cultural Center and Brigham Young University-Hawaii campus and it would likely add to the already growing economic influence of the church's holdings in Hawaii.

The Church of Jesus Christ of Latter-day Saints' economic interests in Hawaii, which pumped $260 million into the state's economy in 2005, have more than doubled in the last decade, according to an economic report commissioned by the church.

The study, prepared by local economist and Hawaii Pacific University professor Leroy O. Laney, examined the economic impact of the Mormon church's interests in Laie, which include Brigham Young University in Hawaii, the Polynesian Cultural Center and HRI.

Together these organizations account for 0.5 percent of Hawaii's gross state product and paid a combined $3.3 million in property taxes in 2005 -- an economic feat that few Oahu business can claim, Laney said.

"The Laie entities are an important export industry, independent of other export drivers in the Hawaii economy, that bring a substantial inflow of funds that would not otherwise be forthcoming," Laney said in the report, entitled Economic Impacts and Issues Related to Three Entities at Laie, Hawai'i Affiliated with the Church of Jesus Christ of Latter-day Saints.

"Even disregarding student expenditures and the conventional net inflows that make any university a kind of export industry, the LDS Church itself and its affiliates have injected very substantial sums that amount to hundreds of millions of dollars over the course of just a few years," Laney said.

The church has had significant influence on Hawaii's economy and its importance -- as indicated by Laney's research -- is growing, said Jack Hoag, HRI chairman and former president of First Hawaiian Bank.

"A similar report in 1996 revealed a net contribution by the Church entities of $100 million. This significant increase of $160 million in eleven years demonstrates the growing value of the LDS Church and its affiliates to the state economy," Hoag said.

The latest report said that BYU-Hawaii, a four year undergraduate institution that educates 2,500 students each year, is a vital economic driver in the Laie community, with cash expenditures over $81 million for payroll, consumption, taxes and vendor pay.

Revenues from the PCC have nearly doubled within the last two decades from $32.6 million in 1987 to $62 million in 2005, Laney said.

As a major employer within the community, the PCC recorded a payroll of $24.1 million and other cash expenditures of $31.4 million.

The attraction also spent $5.5 million on capital improvements.