Pagoda hotel in Hilo to close

Time and neglect have finally caught up with one of Hilo’s oldest hotels.

The property long known as Uncle Billy’s Hilo Bay Hotel is slated to close by July 14 because of health and safety concerns.

Peter Savio, a local developer who took over and renamed the property Pagoda Hilo Bay Hotel last year, agreed to the closure time­table at a state Board of Land and Natural Resources meeting Friday.

The state Department of Land and Natural Resources, which owns the land under the hotel fronting Hilo Bay on Banyan Drive, was contemplating giving Savio a three-year lease to keep the site from being abandoned until a master plan for redeveloping the site could be created. But Hawaii County Mayor Harry Kim and some BLNR members who recently visited the hotel urged a shutdown instead.

“We strongly believe the subject property cannot be safely occupied,” Wil Okabe, Hawaii County managing director, quoted Kim saying in a letter Okabe read to the board. Okabe added that inspectors from the county’s Fire and Building departments plan to make safety inspections of the hotel Tuesday.

BLNR member Chris Yuen said he also was concerned about the condition of the hotel after visiting a few days ago.

Fellow board member Stanley Roehrig called the hotel downright scary. “I wouldn’t put my family in there,” he said, questioning whether asbestos in ceiling tiles documented in a recent study had been disturbed to pose a health hazard. “I want to close the place down today. The reason I want to close it down is not to hurt the people working there. It’s to save their lives.”

Savio described parts of the hotel, including one wing, the lobby and restaurant, as a “disaster.” But he disagreed that guests and employees are in danger. Nevertheless, he agreed that the money-losing hotel should be closed and said he should be able to do that by July 14 by accommodating customers with reservations at other nearby hotels.

Typical occupancy in the 145-room hotel has been only 30 or 40 guests, he said. Only about 15 employees work at the hotel, and they are going to be able to interview for jobs at the neighboring Grand Naniloa Hotel Hilo, which is opening a renovated 63-room wing July 1 and will need to hire 15 to 30 employees.

This is the second time in two years that the hotel has been slated for closure. The first time was in March 2016 when William J. “Uncle Billy” Kimi Jr., who opened the hotel in 1966, announced that the hotel would close upon expiration of the state’s 50-year land lease.

Savio stepped in and assumed the lease before it expired, paid Kimi’s company $150,000 for furniture and fixtures, and then obtained a month-to-month revocable permit that obligated him to pay DLNR $2,984 in monthly land rent.

Savio said Kimi had let the property run down because of the lease’s approaching end, and that his idea as the new owner was to spend some money fixing up the property to keep the hotel open until DLNR and the county decided what kind of redevelopment it wanted for the site. Part of the landlord’s plan was to have a private developer pay to demolish the old hotel, which DLNR estimates will cost $5 million or more, as part of a new lease and redevelopment project.

An analysis of the hotel’s condition commissioned by DLNR from Erskine Architects Inc. a year ago identified unsafe stairwells, fire safety issues and advanced termite damage. The restaurant, some rooms and a convenience store at the hotel have been closed because of condition issues.

Savio said he fixed some things but then pulled back after his permit was challenged by the owner of the Grand Naniloa last year. In May he told DLNR in a letter that needed repairs could be done under a three- to five-year lease to allow recovery of expenses. But on Friday Savio said he reconsidered and felt that the hotel should be closed.

Savio said the July 14 date will allow him enough time to wind down operations and sell off furniture and other items from the property.

A master plan for the site, meanwhile, could be two or more years away from being created and approved, according to the Hawaii County Planning Department.