After repeated rejections, the owners of the Grand Naniloa Hotel in Hilo secured approval Friday from the Board of Land and Natural Resources for a new mortgage to pay off the business’ current one.
WHR LLC, the corporate entity which owns the Grand Naniloa, has been on shaky financial footing ever since the COVID-19 pandemic, having defaulted on a loan in 2021 and subsequently entering foreclosure proceedings.
Ed Bushor, president of WHR’s primary partner, Tower Development, submitted various proposals to the state Department of Land and Natural Resources over the last year to pay off WHR’s $50 million mortgage with other loans ranging from $50 million to $62 million.
But despite recommendations by DLNR’s Land Division to deny the proposal, the BLNR voted Friday to approve WHR’s request to receive a new $50 million loan.
“The board has made a unanimous, great decision for the Hilo community and the state of Hawaii,” Bushor told the Tribune-Herald on Monday.
Bushor and Jordi deHoyos, vice president at Colliers International, attended the Friday meeting and exhaustively laid out the terms of the loan and the Naniloa’s current financial state, which Bushor said was a different picture than that painted by reports drafted by Land Division administrator Russell Tsuji. Those reports, which recommended that WHR’s requests be denied, were inaccurate, Bushor said, to the point of containing outright falsehoods.
“Those reports were trash,” Bushor said. “He was making ludicrous statements.”
“The board just needed to be educated on the new loan,” said Grand Naniloa curator and Tower Development partner Kim Taylor Reece on Monday. “The fact is we had a $50 million Wells Fargo loan, and now we have another $50 million Wells Fargo loan. It’s the same lender, for the same loan amount.”
Bushor and Reece both said that the hotel is doing very well financially, having pulled down $7.8 million in net income last year, beating the hotel’s pre-COVID net income record by more than $2 million.
That success, Bushor said, indicated to the board that a new $50 million loan is both sustainable and reasonable for WHR.
Meanwhile, Bushor said that a new and experienced manager may have helped sway the board. On Friday, the board approved transferring management control of the Naniloa lease to Benjamin Rafter, president of Springboard Hospitality, which runs 46 hotels across 13 states.
Bushor said at Friday’s meeting that he will “semi-retire” and step back from any management role in the hotel, although he will remain an investor.
With the BLNR approval, the loan can proceed, and Bushor said it is expected to close by July 21.
When that happens, he said, the foreclosure proceedings will end — as will “the COVID-era of the Grand Naniloa.”
“Our employees would be injured by a foreclosure, but they’re the ones who should be getting credit for bringing in $7.8 million last year,” Bushor said. “They worked their buns off during COVID, and now they’ve been rewarded with a new loan, and they can know their jobs are safe.”
Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.