The Sheraton Princesss Kaiu­lani is expected to close Aug. 1 for a massive redevelopment totaling $500 million, the highest reinvestment ever made in a single Waikiki property.

The project, which has been in the works for at least five years, represents the next big Waikiki reinvestment for the property’s owner, Kyo-ya Hotels & Resorts LP. Including this latest project, the company since 2007 has spent approximately $1 billion upgrading its four Waikiki hotels.

To put it in perspective, this latest single property investment is equivalent to all of Kyo-ya’s recent combined reinvestments at the Westin Moana Surfrider, the Sheraton Waikiki and the Royal Hawaiian Hotel.

The planned investment, which would bring the first newly built hotel to Waikiki since the 1980s, tops the price tag of the recently announced $400 million redevelopment at the International Market Place and the more than $100 million reinvestment at the Hyatt Regency Waikiki Beach Resort and Spa. It even beats some of the stars of the last renovation wave in Waikiki, which saw approximately $3.5 billion in upgrades over the past decade or so.

"Our owners have an amazing commitment to the community and to our associates. They are putting this kind of money out to say that we believe in Waikiki and in its future," said Kelly Sanders, area managing director, Waikiki, for Starwood Hotels and Resorts, which manages Kyo-ya’s Waikiki hotels.

Sanders said the renovations, which could take up to three years to finish once construction begins, will substantially change the footprint of a circa-1955 property that has not undergone significant renovations since 2000. Final details of the development are still being worked out; however, Sanders said plans call for the existing 260-foot Aina­hau tower to be redeveloped to include 650 hotel rooms.

A new tower, not to rise above 350 feet, will be constructed to provide 300 hotel rooms and approximately 135 residential resort condominiums. The property layout also will be reconfigured to provide more retail and parking while at the same time keeping substantial open space along Kala­kaua and Kaiu­lani avenues.

These changes will take the property from a three-star "upscale" rating to what Sanders said the hotel industry calls the "upper-upscale" category, which would command approximately $75 to $100 more per night per room. The property’s current average daily rate is in the mid-$150s, he said.

"With the way that the hotel is being planned, the view corridors will be fantastic, and that comes at a premium," Sanders said. "The property will concentrate on providing a lifestyle brand that really does speak to the experience of the customer. In order for us to drive success, we have to offer our guests a product that they can enjoy when they come to Waikiki."

Retail analyst Steph­any Sofos said the improvements at the Princess Kaiu­lani will join with those at the International Market Place, Hyatt Regency Waikiki and the former Ohana Waikiki West to create a new luxury hotel and retail epicenter for Waikiki.

"The heart of Waikiki hotels and retail used to be around the Hyatt but moved in the 1980s to Louis Vuitton on Lewers Street and Kala­kaua Avenue. It maintained that location for years because of all of the Ewa growth, including Waikiki Beach Walk, Nike­town, 2100 Kala­kaua and Hilton Hawaiian Village’s Tapa Tower," Sofos said. "Now all of this construction is going to pull the epicenter back, pushing the burger-and-beer set down the road. It’s going to attract the wine-and-cheese and sake-and-sushi people."

Jack Richards, president and CEO of Pleasant Holidays LLC, Hawaii’s largest wholesaler, said Hono­lulu will benefit from additional tax revenues once the property is renovated and its prices go up. During the closure, other Waikiki hoteliers and hotels in Ko Olina, Turtle Bay and the neighbor islands will get a temporary boost, he said.

"It’s going to create compression when they take approximately 1,100 rooms out of commission," he said.

In the meantime Kyo-ya is heavily focused on working with Starwood and Unite Here Local 5 to ease labor concerns. Sanders said the temporary shutdown would displace some 350 associates, including 24 managers.

"We are focused first and foremost on ensuring our associates at the Sheraton Princess Kaiu­lani have the support that they need," said Ernest Nishi­zaki, Kyo-ya’s executive vice president.

Debbie Stephens-Amas, director of human resources at the Princess Kaiu­lani and the Moana Surfrider, said Starwood has started meeting with the workers who will be displaced. Some have already shifted to other properties in Waikiki, the neighbor islands or anywhere the company operates hotels, Stephens-Amas said.

"We’ll work to place as many as we can up to the closure and beyond," she said.

Sanders said the company is committed to placing all of the Princess Kaiu­lani’s associates, and since Nov. 1 has limited hiring at all Starwood Waikiki properties to internal candidates.

"We had a new hiring orientation at Sheraton Waikiki today," San­ders said. "We welcomed 45 new employees, a number of which were from the Sheraton Princess Kaiu­lani."