Princess Kaiulani to stay open

Kyo-ya Hotels & Resorts LP, owner of the Sheraton hotels in Waikiki, has had a change of heart.

After announcing just weeks ago that an ownership change would have no effect on a planned $500 million upgrade of the Princess Kaiu­lani Hotel, the company said Friday that the property will remain open through the end of the first quarter of 2015, and possibly longer, as it re-evaluates the project. The hotel was expected to close Aug. 1 for the largest ever investment in a single Waikiki property.

"This is a very important decision and Kyo-ya is very committed to the community and what impact this project will have in Wai­kiki," Taka­masa Osa­no, Kyo-ya president, said in a news release. "It is my desire to carefully review the plans before moving forward."

The news release did not mention Kyo-ya’s plans for building a new hotel tower on the site of the Moana Surfrider.

Kyo-ya, which employs more than 3,500 workers, owns the Sheraton Wai­kiki Resort; the Moana Surfrider Hotel, a Wes­tin Resort and Spa; the Royal Hawaiian, a Luxury Collection Resort; the Sheraton Princess Kaiu­lani; the Sheraton Maui Resort and Spa; and the San Francisco-based The Palace Hotel, a Luxury Collection Hotel.

Kokusai Kogyo Holdings Co., the parent of Kyo-ya, bought out Cerberus Capital Management LP’s controlling interest in the company in a deal that closed last month in Japan.

The change returns control of Kyo-ya’s assets in the isles to longtime owner Koku­sai Holdings K.K., an entity owned and controlled by Osano and his family members and affiliates. Prior to the sale, Cerberus owned 55 percent of Koku­sai Kogyo, and the founding family owned 45 percent.

In November a Kyo-ya official said the overhaul would substantially change the footprint of a circa-1955 Princess Kaiu­lani property, which has not undergone significant renovations since 2000. Plans called for the existing 260-foot Aina­hau tower to be redeveloped to include 650 hotel rooms.

The company planned a new tower, not to rise above 350 feet, to be constructed to provide 300 hotel rooms and approximately 135 residential resort condominiums. The property layout also was to be reconfigured to provide more retail and parking. The temporary shutdown would have displaced some 350 workers.