What’s Stopping Improvements on Banyan Drive?

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Banyan Drive. PC: Google Images June 2019

Banyan Drive is full of dilapidated hotels that prevent Hilo-side from being able to house the visitors that fuel our economy.

Of the Big Island’s 1.4 million visitors last year, 80% stayed in Waikoloa.

With fewer Airbnb’s available now, “Banyan Drive is a critical long-term component of short-term vacation rentals; more so due to its proximity to downtown Hilo,” said Nate Gaddis, chairman of the Banyan Drive Redevelopment Agency (BDRA).

He added, “Without guests, visitors and residents frequenting our downtown district, it will atrophy.”

The Problem


Many of the 80 leases on Banyan Drive are about to expire; state law caps public land leases at 65 years. Most were established after the 1960 tsunami. Some then received 10-year extensions.

Current leaseholders have little incentive to invest in repairs and maintenance due to these pending lease expirations.

The iconic Uncle Billy’s, renamed The Pagoda, closed down a few years ago after inspectors suggested the hotel close immediately.

Hawai‘i County formed the, appointing board members and support staff who hold meetings and draft a conceptual plans.

However, the agency is incapable of executing the environmental review it needs to complete because the agency is unfunded and has no authority to create funds, Gaddis told Big Island Now.

Approved Banyan Drive conceptual masterplan, December 2016. PC: Alex Roy


Residents praised the conceptual plan in 2016 when they were given the chance to weigh in. However, some objected to the placement of a new hotel which would cut into Lili‘uokalani Park and Gardens.

Current management  by the DLNR of Banyan Drive has been criticized because the funds generated from the revenue produced by the leases go directly towards Hawai‘i Department of Land and Natural Resources (DLNR) operations rather than maintenance of the properties. Hence, the properties have decreased in value over the years.

The DLNR did not respond to Big Island Now’s questions about Banyan Drive.

Also, just recently an audit of the DLNR concluded the way the DLNR is currently managing the leases on Baynan drive, it is foregoing $1.6 million in potential revenue each year just from 16 of the 70 leases that were extended.

Another concern is the fact that the state Legislature continues to defer bills that would modernize these public land management policies. For example, HB 1219 was deferred by Sen. Kai Kahele with no explanation.


However, Gaddis said Sen. Kahele was not to blame. Ultimately, he said, “political fighting and horse-trading” resulted in other critically important bills—such as the funding for the Hilo Medical Center cardiac unit—also being killed.

HB 1219 could still be addressed next year, particularly if the public were to get more involved, Gaddis said.

Another bill, SB 1252, would have passed on the cost of demolition of the dilapidated buildings on Banyan Drive to new developers in exchange for the DLNR authorizing rent reductions for up to 20 years. It was referred to several committees on March 7, 2019.

However, in 2018, the Legislature did pass SB 3058, which allows leases to be extended up to 40 years as long as at least 30% of the property’s market value was reinvested into maintenance.

Land Ownership BDHRA Map PC: Courtesy photo Alex Roy

The Vision

Alex Roy, senior planner at the County Planning Department, said the plan for the area is to have, “more consistent and efficient access from the cruise ship docks all the way to downtown … change the golf course at Banyan Drive into a new park for residents, provide more safe walking access throughout the whole area and provide more commercial spaces and hotel rooms for visitors, all while attempting to address sea-level rise that will impact this area in the future.”

Roy went on to explain the plan is meant to “increase the available hotel rooms for the Hilo area, improve walking access through Banyan Drive area, improve safety for residents/visitors by improving infrastructure, and increase commercial uses to accommodate visitors and residents.”

It is also meant to “boost cultural and economic opportunities for East Hawai‘i,” said Gaddis. “Most long-term visions proposed include a cultural center of sorts to showcase East Hawai‘i as the hula center of the world, beyond just the festivities currently centered around the Merrie Monarch Festival.”

Making the Difference

“You need to have people experienced in development and planning actually tasked with, funded for, and given authority to execute development plans,” said Gaddis.

Lili‘uokalani Park in Hilo. Courtesy photo

“The lesson to be learned for the public and local politicians is to clearly identify the top three or four critical measures for each session and to voice a united storm of support for them with the media in tow so the folks involved collectively feel the heat both during and after session when one of those key bills gets crushed,” said Gaddis.

For more information, click here. A fact sheet can be found here.

Contact your state representatives, the BDHRA or the Hawai‘i County Planning Department to provide feedback.


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