Hawaiʻi County purchases Dolphin Bay Hotel, will transform it into affordable housing

This story was updated at 8:44 a.m. Nov. 22 with a corrected price for how much Hawaiʻi County paid for Dolphin Bay Hotel.

Hawaiʻi County Office of Housing and Community Development isn’t making a move into the hotel business, but it did purchase a hotel in Hilo.

Dolphin Bay Hotel will no longer house visitors, however. It will instead offer 18 new long-term affordable rental options on the north side of the East Hawaiʻi community.

The county housing agency — for the first time in history — acquired the hotel, located in the Puʻuʻeo area of Hilo, with plans to convert guest rooms into studio, 1-bedroom and 2-bedroom apartments specifically for residents earning up to 50% of the area median income.

First units are anticipated to be ready by early 2026, pending renovation schedules and permitting timelines.

“For decades, Dolphin Bay has been a gathering place and a home for many,” said the hotel’s former owner John Alexander in a county release about the purchase. Alexander’s family in 1968 established the wayfarer’s respite. “I’m happy it will continue that role as affordable housing for local families.”

Hawaiʻi County Housing Administrator Kehaulani Costa noted the $2.68 million purchase — made possible by using federal funds from the Emergency Rental Assistance 2 Program — is part of the her office’s strategy to expedite the expansion of affordable housing opportunities on the Big Island.

“Building new housing takes time, but families need help now,” said Costa in the county’s release. “By purchasing existing housing, we can deliver affordable units faster and provide immediate relief for residents struggling with high housing costs.”

Hilo Brokers Ltd. facilitated the sale. Real Estate broker Kona Moran said helping with this purchase meant more than just the transaction.

“It was about preserving a sense of community,” said Moran in the county release. “Thanks to John Alexander’s commitment, Dolphin Bay will continue to be a place local families can call home.”

Mark Development Inc. will manage the property and provide updates in the coming weeks about applying for units.

“Through this sale, the Dolphin Bay Hotel will continue its legacy of serving the Hilo community,” said Hawaiʻi County Mayor Kimo Alameda in the county release. “I want to thank the Alexander ʻohana for partnering with the county to ensure these units stay affordable in perpetuity.”

Visit the Mark Development Inc. website, Hawaiʻi County Office of Housing and Community Development website or email to meghanb@mdihawaii.com for additional information of with any questions.