Jan 21, 2014, 6:54am HST
Duane Shimogawa Reporter – Pacific Business News

The owner of the Ilikai Hotel in Waikiki is currently in the process of renovating its 203 units in the iconic hotel-condominium, with plans to eventually sell them to individual owners, a spokesman for the owner told PBN.

“We are actively working with various stakeholders to make this as compelling a proposition as possible and are open to working cooperatively with Local 5 to develop a plan that addresses the needs of all parties,” New York-based iStar Financial spokesman Jason Fooks said.

Ilikai hotel-condo listings for sale

However, a spokeswoman for the Unite Here Local 5 hotel workers union, told PBN that if the sale goes through, it is unlikely that a viable hotel operation will continue to exist at the Ilikai.

“We once had over 600 well-paid union hotel workers at the Ilikai in the 1960s and 1970s,” the spokeswoman said. “We are now down to 63 workers.”

The renovation includes new hotel-grade furniture, luxury fixtures and furnishing, high-end materials and new guest amenities, including full kitchens in all units.

When iStar took back the 203 units in a 2009 foreclosure auction, only 35 percent of Ilikai Hotel units were configured with kitchens, which are a significant guest draw for the hotel, the owner said.

“We are also seeking to convert the under-utilized second floor into additional condo-hotel units of the same quality as the units we own on the 22nd through 25th floors,” Fooks said. “[We] intend to market all of these units for sale to individual owners who will also be offered the choice to keep them as part of the iconic Ilikai Hotel.”

When iStar Financial took ownership of the condominium units comprising the closed-down Ilikai Hotel in July 2009, it rejected the option of marketing these units for sale as residences, choosing instead to retail Hotel Management Services to reopen the hotel, Fooks said.

The owner also set about renovating the retail areas of the building, which were substantially vacant at the time, and secured new tenants for the spaces.

“From this uncertain beginning, [we have] worked with hotel employees, management, the building’s [association of apartment owners] and its residential condo owners, and other stakeholders to revive and grow the Ilikai Hotel and reinvigorate the Ilikai condominium building in which the hotel is housed,” Fooks said. “Since [we] took ownership and [Hotel Management Services] restarted operations, the Ilikai Hotel has grown in room count, the retail areas have been re-tenanted with new businesses and amenities, and a new collective bargaining agreement has been negotiated and ratified by the hotel’s employees.”

The Ilikai building consists of 1,009 hotel-condominium units, 90 percent of which are operated in some form of hotel, vacation or monthly rental program.

Ilikai hotel-condo listings for sale

With the owners’ support, in 2011, iStar said that Hotel Management Services initiated a rental program for individual owners to have their units operated as part of the Ilikai Hotel, with about a dozen buyers of units iStar previously sold, as well as other owners, joining the hotel pool, Fooks said.

“In 2013, the Ilikai Hotel was actually larger in room count than it was when [we] reopened it in 2009,” Fooks said. “As owners of the Ilikai Hotel’s front desk and the lobby-level retail shops, [we] have consistently worked to strengthen and improve the Ilikai Hotel, as its closure would significantly reduce the economic value of the over 100,000 square feet of commercial and resort retail areas that [we] own in the building.”

Ilikai hotel-condo listings for sale