Business Monday: Sale price drops 50% for 2 Kona restaurants along Aliʻi Drive

About a year ago, the leases and contents of two well-known Big Island restaurants – the Kona Inn Restaurant and Kona Canoe Club – were listed for $3 million, but last week the price dramatically dropped.

The two turn-key establishments, nestled in the Kona Village Shopping Center along the bustling Ali‘i Drive in downtown Kona, now are being sold together for $1.5 million. Or, they can be purchased separately, with Kona Inn Restaurant listed on BizQuest at $1.1 million and the Kona Canoe Club at $400,000.

Bob Mardian, majority stakeholder in the two restaurants, said the two restaurants have been a staple for the community for decades and are in stellar locations with sunset views.

The Kona Inn Restaurant — part of the former Kona Inn, the first luxury hotel on the Big Island that opened in 1928 — offers panoramic views of the bay, from Kamakahonu Historical Landmark at King Kamehameha Beach Hotel to Royal Kona Resort.

The Kona Canoe Club, which once was a sports bar owned by famed LA Dodgers pitcher Don Drysdale, is along the breaking shoreline of Kailua Bay.

The 78-year-old Mardian said he decided to sell the restaurants after the landlords for his two eateries in California – Wind & Sea and Harpoon Henry’s at Dana Point Harbor – informed him they weren’t renewing his leases. He is now month-to-month.

“I took it for granted that they would renew my lease, and now I have nothing to sell,” Mardian said. “I wasn’t going to make that mistake in Hawai‘i.”

The Kona restaurants would come with long-term leases that expire in 2034. Mardian said monthly rents are about $6,000 at the Kona Canoe Club and $12,000 at the Kona Inn Restaurant.

Mardian leased the Kona Inn Restaurant space in the late 1970s after the Kona Inn stopped hosting guests in 1976. The hotel’s sprawling boardwalk property was turned into a retail shopping center in the 1980s.

Mardian said he was drawn to the space for its reputation of being the first resort and restaurant to entertain guests coming to Kona.

When Mardian reopened the Kona Inn Restaurant in 1979, he wanted to replicate the original eatery while paying homage to those who came before him. Walking into the establishment’s rotunda from the shopping village, the walls are lined with taxidermied trophy fish — including marlin, shortnose spearfish and longnose spearfish – that were caught over the years in Kona waters.

The 8,000-square-foot area takes patrons back in time. The walls are decorated with photos from the original owner’s family album, Mardian said. Images show what Kona looked like nearly 100 years ago. Pictures also are of guests who visited the hotel, including First Lady Elenor Roosevelt.

There is a mammoth horseshoe-shaped all-Koa-wood bar, a longtime watering hole known for its Mai Tais.

It also feature a belt-driven fan systems operated with pullies.

“People never forget the fans,” Mardian said.

The menu has changed very little over the years, with fresh fish dishes remaining the specialty.

“I love the calamari. I order the calamari every time I’m there,” said Ross Wilson, executive director of the nonprofit Kailua Village Business Improvement District.

Wilson was at the inaugural dinner when Mardian opened the restaurant in the late 1970s.

“It was the first of its kind that brought a new era of dining to Kailua Village,” Ross said of Kona Inn Restaurant. “Before that, Kona was a sleepy fishing village.”

The establishment brought an element of elegance and unique dining experience serving fresh daily catch seafood.

Mardian took over the space that is now Kona Canoe Club in 2005. In the 1980s, the 3,000-square-foot space was owned briefly by Drysdale. The sports bar relocated to Keauhou and closed in 2012.

The owner of the shopping center, “Uncle Billy” Kimi opened a restaurant called Hang Loose, which he managed after the sports bar moved, before it became the Kona Canoe Club.

The Kona Canoe Club offers outdoor seating right next to the crashing waves of Kailua Bay. The restaurant features a variety of drinks and cocktails and food from burgers to sandwiches to potato skins and fish.

“Whoever buys the restaurants will be getting a gem,” Wilson said.

According to the real estate listing, the Kona Inn Restaurant comes with significant hard assets, including machinery, equipment, furniture and leasehold improvements.

“The combined value of these assets exceeds the asking price, offering a compelling opportunity for buyers seeking a turn-key operation with substantial built-in value,” the listing said. “Rebuilding these restaurants from scratch would require a significant capital investment, far beyond the price at which they are being offered.”

Mardian said: “We’ve had some nibbles, more nibbles on the Kona Canoe Club than on Kona Inn Restaurant.”

After a year of posting the restaurant leases for sale, Mardian decided to reduce the prices before the leases lose too much value.

Every year that goes by where the leases aren’t sold, the next leaseholder won’t have enough time to earn back their investment into the restaurants, Mardian explained.

He hopes to sell Kona Inn Restaurant to someone who wants to continue the tradition of the iconic establishment.

“I don’t think the person who buys Kona Inn would want to change the name. I think the name resonates with people,” he said.

Click here for more information and details about these establishments.