(BIVN) – Big changes could be coming to the Banyan Drive area of Hilo, where the Country Club Apartments and the former Uncle Billy’s will be replaced by new hotel accommodations, if the Hawaiʻi land board approves two proposals at a Friday meeting.

Tower Development Inc., an affiliate of WHR LLC which already holds the state lease for the Grand Naniloa Hotel, has been chosen by a committee as the recommended redeveloper of both Uncle Billy’s and the Country Club Apartments. The Grand Naniloa is located next door to both properties.

Last August, the State of Hawaiʻi published a Request for Qualifications / Request for Proposals for the redevelopment of the dilapidated properties. An evaluation committee was appointed to analyze and make a recommendation to the Board of Land and Natural Resources. Tower Development Inc emerged as the favorite for both projects.

Two other companies – MacDonald Ladd Dev. LLC and Pagoda Hilo Bay LLC – also submitted proposals for the Country Club renovation. Tower Development Inc (TDI) submitted the only proposal for Uncle Billy’s.

The BLNR will decide on the recommendations at its September 24 meeting.

Land board documents show Tower Development is proposing to demolish one-third of the buildings on the Uncle Billy’s property, “specifically the building on the southwest portion of the property, and substantially renovate and repair the remaining structures,” in order to make way for a 100 to 125-room Hampton Inn & Suites by Hilton. The demolished buildings will be replaced with grass and park areas, the document says.

The new Hampton Inn will employ between 30 to 50 people. The total estimated project cost is $29 million. “In the first year of hotel operations, TDI projects about $4.5 million in total revenue, with revenues increasing each year thereafter,” the land board documents says. “TDI’s projected timeline for the project is three months for the negotiation of the development agreement, six months for lease approval, 18 months for design, Board approval, and permitting, and two years for construction. A 30-day employee training period would precede opening of the hotel for business.”

From slide presentation in BLNR document

Tower will pay rent to the State “beginning in year two of the lease (after a one-year rent waiver) in the amount of $10,000 per year, increasing to $20,000 per year in year 11 of the lease, and increasing to $30,000 per year-in year 21 of the lease,” the land board document says. “Although the rent is low for the first 30 years of the lease, it may tum out to be near market rent considering the extent oft he investment required to be made in the property.”

The proposal may also result in the sublease of a portion of the Naniloa golf course for use as additional parking for the proposed Hampton Inn project.

For the Country Club Apartments property, Tower proposes to “retain existing building envelopes, demolish current interior improvements and exterior cosmetic and deferred maintenance items and substantially renovate the balance of the project.”

“The renovated buildings will be put into operation for transient accommodations as a Home2 Suites or another limited service branded hotel by Hilton,” the documents states. Other documents show renderings for a proposed Hilton Embassy Suites on the property. Tower intends to employ about 50 employees in the new hotel operations. The proposed rent is $75,000 per year for the first 10 years and steps up 1.5% per year beginning in year 11.

From slide presentation in BLNR document

Tower plans to use the same management company for the two renovated properties as WHR LLC uses for the Grand Naniloa Hotel.

“Additional elements” of Tower’s proposal include allowing up to one acre of the Naniloa golf course to be used as public parking for the Reed’s Bay Park, providing up to one acre of additional golf course lands to be used for Hilo Bayfront Trails, and “dedicating the rest of the golf course to the Department and the County for future public uses.” The golf course proposals would require the land board’s prior written approval and are not part of the Friday meeting.