A loan that Unity House used to buy The Lotus at Diamond Head hotel about a year ago is overdue, but the local nonprofit labor welfare organization expects to refinance the mortgage and retain ownership of the 51-room boutique hotel in Waikiki.
Unity House bought the property for $8.5 million in December 2009 at a foreclosure auction after the previous owner, local developer Brian Anderson, defaulted on mortgages tied to the property.
Anderson bought the hotel for $8 million in 2004 but had used the property to secure other real estate investments. At the time of foreclosure, Anderson owed lenders $11.3 million.
Unity House board Chairman Jim Boersema said a new loan has been arranged to pay off the overdue loan held by MK Pacific LLC. The transaction is expected to be completed in about 30 days.
"The hotel is doing fine," he said, adding that there should be no change in operations managed by Castle Resorts & Hotels.
Unity House previously had contemplated converting the property to time-share or condominium use, but has maintained hotel operations since its acquisition.
The organization, founded in 1951 by Arthur A. Rutledge, maintains a fund for administering welfare programs for the benefit of organized laborers.