By TOM CALLIS
Tribune-Herald staff writer
The Naniloa Volcanoes Resort is not out of rough waters yet.
On Monday, the state Department of Land and Natural Resources filed an appeal against the sale of the troubled Hilo hotel while the approved buyer is struggling to come up with funds to complete the purchase.
The notice of appeal filed in U.S. Bankruptcy Court did not provide a reason for the state’s objection to the sale.
But a senior DLNR official had expressed concern over the court’s decision to transfer the hotel’s lease for the property, which the department manages, to the buyer without its consent. DLNR representatives could not be immediately reached for comment.
David Farmer, Naniloa’s bankruptcy trustee, said Monday was the deadline for an appeal to be filed, and he considered it a “place holder.” The Board of Land and Natural Resources is scheduled to discuss the sale Friday.
U.S. District Court would handle the appeal.
But the sale to Tower Development Inc. could implode before that can be considered.
Farmer said the company, which partnered with Wyland Hilo Hotel LLC to make the $5.2 million purchase, has missed a deadline to come up with all the cash.
The deal was scheduled to close today and the court required the buyer to provide the entire purchase amount three days prior, he said.
Farmer said Ed Bushor, Tower Development president, has asked for an extension until Dec. 18.
“It’s up to us,” Farmer said. “We’ll see.
“The judgement we have to make is when is enough enough in terms of delays and dragging their feet.”
So far, the buyer has provided $770,000, Farmer said.
Bushor is also scheduled to make a presentation to BLNR on Friday, according to its agenda.
If the deal falls through, the sale would go to Peter Savio, who owns Pagoda Hotel in Honolulu, Farmer said. Savio had made the second highest offer of $5 million.
Farmer and Hawaii County also remain at dispute over fines the county issued on numerous building violations at the hotel.
Issued in October, the two fines totalled $2,000 but increase by $1,000 for each day they go unpaid, according to court records.
Farmer has sought to have them dismissed, which the county has challenged.
Email Tom Callis at email@example.com.