Hawaii real estate mogul Jeff Stone will spend $500 million as part of his vision to re-brand the JW Marriott Ihilani hotel at Ko Olina into a Four Seasons resort.
The developer will meet with the 500 Ihilani hotel employees Saturday afternoon to unveil a plan that will include a new 15-story tower with 150 luxury homes, the first Four Seasons-branded estates in the islands.
Stone’s The Resort Group has partnered with one of North America’s largest luxury developers, Canadian-based Westbank, to acquire and redevelop the property in a deal that is expected to close Monday, Stone said. The seller is Cornerstone Real Estate Advisers LLC.
The partners are each financing half the project. They anticipate spending $250 million for the acquisition and $250 million for redevelopment, Stone said.
"This is the fulfillment of a long-held dream for Ko Olina," Stone said. "The economic impact of the project, the return to the state and county, is over $1 billion. This is a real hotel with real residences that are part of the hotel. No brand has ever come and done this."
Stone confirmed his plans Friday after some information on the redevelopment, including a proposal to build a second tower, was publicly disclosed one week ago.
The Four Seasons, which operates properties on Maui, Hawaii island and Lanai, has had its eye on Ko Olina for nearly 25 years. The company signed a contract in 1990 to bring its luxury brand to Ko Olina, but plans were shelved following the downturn in the economy, according to Stone, who later attempted to bring the label to the resort in 2008 when the economy stalled.
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TIMELINE:
» 1993: Japan Airlines opens Ihilani Resort & Spa.
» 1999: Partners Jeff Stone (The Resort Group) and Cornerstone Real Estate Advisers LLC acquire Ihilani and reposition it as a JW Marriott property.
» 2014: The Resort Group signs management agreement with Four Seasons.
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"The plans were done, the building permit was pulled. It was fully designed," Stone said of the initial Four Seasons attempt in 1990. "It was really meant to be more of a Wailea product, but it didn’t come together. The luxury market is clearly back."
The first phase of the project, which is expected to close the hotel for a year, will start Jan. 10 and include a major renovation of the existing 401-unit hotel. Once completed, there will be 195 rooms dedicated for hotel use and 206 resort condominium residences priced at $1.5 million to $5 million.
The overhaul will include a wedding chapel, two new main pools, seven private pools, a coconut grove, a remodeled resort entry, a lobby atrium with a ceiling-to-floor 3-D art piece and a new grand staircase and water promenade.
The hotel is expected to reopen in December 2015 before work on the new tower begins in January 2016.
The tower, which will be designed by renowned Japanese architect Toyo Ito, will be at the site of the stand-alone Hokulani ballroom, which will be razed over the next two years. It will be sold as fee-simple units ranging in price from $5 million to $10 million. Owners will have the luxury of Four Seasons hotel services and amenities 24 hours a day and can opt to have the operator manage their units for rental when not occupied.
"Ko Olina on Oahu, with its pristine natural beauty, is an ideal place for Four Seasons to create a world-class resort and residential experience that exemplifies Hawaiian hospitality at its best," said Isadore Sharp, founder and chairman of Four Seasons, in a press release.
While the project is underway, all 500 employees will receive severance packages totaling $5.2 million, including medical benefits, from The Resort Group and Cornerstone Real Estate Advisers, a subsidiary of Massachusetts Mutual Life Insurance Co. Stone expects to rehire about 800 workers.
"We in the community would love to have more jobs; that’s what we’re longing for. That’s part of the second city," said Evelyn Souza, chairwoman of the Makakilo/Kapolei/Honokai Hale neighborhood board. "Any kind of employment is an added plus, but in the meantime while he does the conversion, it’ll come at a cost. And it’s going to be at the expense of those people employed there."
For each year of service, workers will get one week’s pay and one week’s medical coverage, and they will qualify for six months of unemployment, Stone said. In addition, he plans to set up a free training program backed by Cornell University to prepare workers over the summer for a higher level of service, from a four-star Marriott hotel to a five-star brand.
"We’re expecting every single person to reapply," Stone said. "These are very valuable people. We’re going to do everything we can to keep them."
Besides Ito, the design team for the project includes James K.M. Cheng Architects, Group 70 International, Philpotts Interiors and SWA Group.
Honolulu Mayor Kirk Caldwell said in a statement that the addition of a Four Seasons resort on Oahu will boost the island’s tourism base and support economic growth on the Leeward Coast.
"The city looks forward to working with Four Seasons on their expansion plans and the growth opportunities they bring to Ko Olina," he said.
Ko Olina, originally conceived in the mid-1980s, is the site of Aulani, Hawaii’s first Disney Resort & Spa, which opened in 2011.
The 650-acre master-planned community also is home to Marriott’s Ko Olina Beach Club, several private resort residential communities, the state’s only private deep-draft marina, the Ko Olina Golf Club and four oceanfront white-sand lagoons connected by 1.5 miles of shoreline.
