State takes first steps toward demolition of Uncle Billy’s

Initial work began Friday in an effort to demolish the dilapidated and unsafe former Uncle Billy’s Hilo Bay Hotel.

Overgrown vegetation surrounding the front of the Banyan Drive building was cleared, and a perimeter fence will constructed around the entire property starting later this month, according to a statement from the Department of Land and Natural Resources.

Andrew’s Fencing LLC has been contracted to build the fence around the former 148-room hotel, which closed in 2017 and later was condemned.

The fencing work will start work in August and take about one month to complete. The purpose of the fence is to physically secure the site from “continued illegal occupation and to alleviate health and safety concerns.”

Demolition of the building could begin by the end of the year, according to the DLNR.

The department noted that an emergency proclamation issued July 18 by Gov. Josh Green removes and/or expedites some of the regulatory processes associated with removal of the hotel, “but it does not exempt a demolition contractor from securing material disposal certificates and other regulatory permits.”

A demolisher has not been chosen yet through the state procurement process.

Green’s proclamation calls the hotel an “emergency situation” and expires on Sept. 15. It can be extended for 60 days.

The Legislature in 2022 appropriated $13.5 million out of the DLNR Special Land and Development Fund for the demolition of the hotel. However, the SLDF does not have $13.5 million to pay for the demolition.

In the 2023 session, the Legislature appropriated $8 million in reimbursable general obligation bond funds that the DLNR will have to pay back over time with interest, according to the department.

DLNR will use the $8 million to pay for the demolition under the emergency proclamation.

“We appreciate the governor’s emergency proclamation as we have long sought a solution to Uncle Billy’s,” DLNR Chair Dawn Chang said Friday in a statement. “DLNR has been planning for the demolition of the hotel for many years and has been seeking legislative appropriations for the demolition since 2019.

“The Legislature did not make funds available until the 2023 session. The proclamation is intended to remove some of the regulatory processes that can delay timely demolition and removal. It speeds up the permitting and contracting process by suspending certain state and county permitting and procurement requirements.”

Chang added that by demolishing the building, “the state is removing a serious health and safety hazard to provide greater opportunities for economic development or recreational opportunities of the site.”

Once Uncle Billy’s is demolished and the property is cleaned up and restored to bare ground, the DLNR will make recommendations to the Board of Land and Natural Resources, in consultation with the community and stakeholders. This planning process will help decide the future use for the property.

“We are part of a collaborative working group coming up with a vision for the future of Banyan Drive, and this will not be DLNR’s vision alone,” Chang said.

This includes conducting an updated strategic assessment of the Banyan Drive area.

During its July 14 meeting, the BLNR authorized Chang to negotiate a memorandum of agreement with the Hawaii Community Development Authority to procure and manage a consultant for this project.

In addition to the demolition of the hotel, another Banyan Drive priority, according to the DLNR, is the renovation of the former Country Club Condominium Hotel.

At its meeting on April 28, the BLNR authorized the DLNR to negotiate a development agreement for this project with Banyan Drive Management LLC. Those negotiations are ongoing.