State releases $1 million for feasibility study, redevelopment planning of Waiākea Peninsula, Banyan Drive in Hilo

State funding that was secured a year ago has finally been released by Hawaiʻi Gov. Josh Green to begin master planning for the redevelopment of the Waiākea Peninsula that includes iconic Banyan Drive in Hilo.

The $1 million was secured in last year’s legislative session by the late Rep. Mark Nakashima, which could be used over three years. It was set aside to create a special fund within the state’s Hawai‘i Community Development Authority to study the feasibility of revitalizing the area.

It also will fund a consultant to do the master redevelopment planning for the Waiākea Peninsula.

“I’m on Cloud 10, because that’s higher than Cloud 9,” said Hilo Rep. Sue Keohokapu-Lee Loy with a laugh Monday. “The funding would’ve lapsed had it not been released. This is a great day for Hilo.”

Craig Nakamoto, executive director of the Hawai‘i Community Development Authority, said the planning will look at what kind of uses are feasible and wanted in the area, but also determine what infrastructure is needed to support those uses.

“People see the potential in Banyan Drive,” Nakamoto said. “If there could be development, it means more economic development for the area and the island.”

The area also includes Liliu‘okalani Gardens, Reeds Bay Beach Park, the condemned Uncle Billy’s Hilo Bay Hotel and Coconut Island. 

The second — and final phase — of demolition of the hotel started earlier this month, marking a significant step toward revitalizing the Waiākea Peninsula. Estimated completion date is January 2026.

The peninsula was once a hub for Native Hawaiian spiritual and cultural practices and later became a thriving economic center and tourist destination, with the road lined by banyan trees, several planted by famous people. Now, parts have become rundown and plagued by illegal activity and the homeless.

Momentum for revitalization of the peninsula and Banyan Drive areas picked up steam after Hawai‘i Gov. Josh Green signed an emergency proclamation in July 2023 to help clean up, secure and demolish the Uncle Billy’s property, which became a den for illegal activity — from squatting to drug use and even arson — after it permanently closed in 2017.

The state agency has already selected a Hawai‘i-based consultant firm, but was waiting for the release of the Capital Improvement Projects before it could enter into a contract for the work.

The consulting process will include engaging the community in public meetings.

The Hilo community has met with state officials in the past to discuss the development of the peninsula. In 2023, a workshop and design lab were hosted. A series of technical studies were presented during a community meeting, including climate, sea level rise, economic growth, infrastructure issues capacity and more.

The county commission Banyan Drive Revelopment Agency also was formed a few years ago to address the peninsula and its aging structures.

Hawai‘i Island Sen. Lorraine R. Inouye issued a statement Monday expressing her excitement over Green’s decision to release the general obligation bonds for the Capital Improvement Program.

The funding, Inouye said, will support both a community development and infrastructure master plan, marking a key step toward reimagining the peninsula to better serve East Hawaiʻi residents and visitors.

“With the continued support of our state and county partners, I look forward to seeing this vision take shape,” Inouye said.

Keohokapu-Lee Loy is now championing the efforts to plan and develop the Waiākea Peninsula at the state level. This past legislative session, she presented House Bill 818, which would create the Waiākea Peninsula Community Development District under the guidance of the state’s Hawai‘i Community Development Authority.

In 1976, the State Legislature established the authority to plan for the future development of underutilized urban areas of Hawai‘i through promoting and coordinating the public and private sector. But these “Community Development Districts” has been underused.

At the time she presented the measure earlier this year, Keohokapu-Lee Loy said the creation of the district would be exciting because it would leave two seats open for Hilo residents.

While the bill didn’t pass, Keohokapu-Lee Loy is looking forward to what the consultant’s scope of work will entail for the peninsula.