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UPDATE: DLNR Given OK to Hire Naniloa Consultant

January 7, 2014, 6:48 PM HST
* Updated January 13, 6:50 PM
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***Updated Monday, Jan. 13.***

The Board of Land and Natural Resources on Friday approved the request to hire a consultant to oversee renovations to the Naniloa Hilo Hotel.

The hotel, which recently changes hands during bankruptcy proceedings, is located on a state land lease.

Posted 6:48 p.m. Jan. 7:

In an apparent attempt to avoid the problems encountered with the previous lease-holder, the state is looking to hire a consultant to oversee renovations to the Naniloa Hilo Hotel.

The state Department of Land and Natural Resources is asking for permission to hire those with technological know-how to assist it in reviewing of plans and other documents related to the hotel.

The Board of Land and Natural Resources will take up the request at its meeting Friday in Honolulu.

The resort formerly known as the Naniloa Volcanoes Resort was recently sold in bankruptcy to Tower Development, which has arranged for the resort to be managed by Honolulu-based Aqua Hospitality.

During the bankruptcy proceedings, the County of Hawaii notified former Naniloa owner Ken Fujiyama that his efforts to comply with state-mandated improvements had resulted in dozens of violations of building, electrical and plumbing codes.

Mayor Billy Kenoi told Fujiyama that the violations were so egregious he was considering shutting down the resort.

When Fujiyama acquired the lease for the resort in an auction in 2005, one of the requirements was to carry out $5 million in renovations within three years. Two years later, it was found out that the renovations were being done without required county building permits.

In the years that followed, Fujiyama was cited numerous times by the state for failure to follow lease terms involving completion of those renovations, maintaining bonds and payment of rent, state and county taxes and other bills.

In an ambitious timetable submitted to the board, Tower, the new owner of the resort’s assets, has indicated it will correct the violations as part of major renovations.

However, neither the DLNR’s Land Division nor Engineering Division has the staff with the necessary expertise to oversee renovation of high-rise hotel structures, the DLNR said in the request to the land board.

“The requested contract services will facilitate the administration of one of the few large hotel leases the department manages and promote public safety,” the request said.

During Friday’s meeting, the land board is expected to hold a closed, executive session for a briefing on the status of the Naniloa lease.

The DLNR also previously filed a notice with the bankruptcy court to “preserve appeal rights” based on the court’s approval of the Naniloa transfer without first mandating that the county code violations be corrected.

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