The $8 million demolition of the dilapidated former Uncle Billy’s hotel in Hilo is set to commence with asbestos abatement work starting next week.

Demolition contractor Isemoto Contracting Co. of Hilo on Monday began moving equipment to the condemned structure on Banyan Drive, according to the state Department of Land and Natural Resources.

The demolition plan, including the removal of asbestos, is scheduled to be completed in 12 months. The project follows an emergency proclamation issued by Gov. Josh Green expediting procurement, permitting and bidding requirements.

The once-thriving 146-room Uncle Billy’s Hilo Bay Hotel was built in the late 1960s but is now one of multiple properties on Banyan Drive owned by the state.

The property was occupied by hotel operators under a long-term lease that expired in 2016. The hotel ceased operating in June 2017, and the last month-to-month tenant vacated in August 2020. After the ground leases expired at the property, the state became the hotel’s owner.

Even before the end of hotel operations, the condition of the property deteriorated due to deferred and ignored maintenance. No significant repairs or maintenance have been performed on the hotel since June 2017, according to the state.

In recent years the deteriorating hotel became a target for break-ins, squatters, vandalism, graffiti and arson fires, and that led to sweeps by law enforcement to stop illegal activities and keep people out.

Officials said it is dangerous to be inside due to rubbish, human waste, hanging wires and trip hazards.

After asbestos was discovered on the property, the structure was described as being an even greater hazard. The state cleared vegetation around the property and constructed a perimeter fence.

But that didn’t stop the break-ins and vandalism, so over the past 2-1/2 months, officers from the state Division of Conservation and Resources Enforcement have maintained an around-the-clock presence.

Officials said state officers were scheduled to work their last security shift Monday.

DLNR Chair Dawn Chang said her department’s primary concern was health and safety, and the extra security measures were needed to keep the hotel uninhabitable.

“We realize how long the greater Hawaii island community, and folks in Hilo in particular, have waited for work to begin at Uncle Billy’s,” Chang said in a news release.

Officials said the future use of the 1.8-acre property has not been determined, but likely will involve input from interests in Hilo and stakeholders on historic Banyan Drive. Any plan will have to receive approval from the Board of Land and Natural Resources.

Officials said the state will continue to collaborate on the Uncle Billy’s project with Hawaii island Mayor Mitch Roth’s office, county departments, the County Council and area state legislators.

The Legislature appropriated $8 million earlier this year for the work, using general obligation bond funds that DLNR must pay back over time with interest.

DLNR unsuccessfully sought legislative appropriations from 2019 to 2021 to pay for demolition following unsuccessful attempts to strike a deal with a private developer to renovate or redevelop the property.