State and Hawaii County officials are weighing an expedited closure of Pagoda Hilo Bay Hotel after an inspection this week found numerous health and safety issues.
Mayor Harry Kim said a report was sent to Department of Land and Natural Resources with a recommendation that “there should be serious consideration of a closure as soon as possible.”
The Land Board voted June 9 to close the hotel — formerly known as Uncle Billy’s — July 14 rather than seeking a short-term lease that would allow it to continue operating.
The board said the closure could happen sooner depending on results of the inspection. A new long-term lease, that could involve construction of a new hotel, is being considered.
County Managing Director Wil Okabe said the Tuesday inspection found electrical and fire code violations, heavy termite damage and areas with open ceilings. Only about a third of the 145-room hotel was in use.
Additionally, Public Works Director Frank De Marco said beds were found in a stairwell.
Okabe said a plumbing inspection will occur Monday.
This is not the first time problems were identified at the aging hotel, estimated in 2014 to have five to 10 years of useful life.
A DLNR report from June 2016 found the hotel to be in “extremely poor condition and bordering on a state of dilapidation.”
Savio ABH Development Co. LLC took over the land lease from Hilo Bay Hotel Inc. in February 2016. The lease expired the following March when it became a revocable permit.
Peter Savio, Savio ABH Development president, said the hotel was in bad shape when he took it over.
He said the approximately 40 remaining guests will be relocated to the Hilo Hawaiian.
“I have no problem with it,” Savio said, regarding the impending closure. “The hotel was old, it was past its useful life.”
He told DLNR that the hotel’s sewer line was replaced, a new backflow preventer was installed and some termite damage was repaired. The kitchen was closed because of fire concerns.
Savio also told DLNR additional repairs were put on hold while the Land Board decided whether to seek a new short-term lease.
Meanwhile, DLNR hired a consultant to assess the cost of demolishing the hotel.
It’s not clear yet when a teardown would occur.
DLNR spokesman Dan Dennison said in an email that consultant R.M. Towill Corp. will provide the department with an estimate on costs of permitting and demolition. Those costs would be covered either by a new lessee or the state.
“If no one is interested we’ll then ask the Legislature for a (capital improvement) appropriation,” Dennison said. “We don’t have the funding at this time to do any of the demolition work ourselves.”
Kim said he knows of two companies interested in building a new hotel at the site, including Tower Development, the managing partner of the Grand Naniloa Hotel.
Email Tom Callis at tcallis@hawaiitribune-herald.com.
