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The Honolulu Advertiser
Posted on: Sunday, January 24, 2010

Hotels ready for extreme makeover

By Robbie Dingeman
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Princess Kaiulani hotel owner Kyo-ya is planning for an extensive facelift.

BRUCE ASATO | The Honolulu Advertiser

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Hawaii news photo - The Honolulu Advertiser
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Kyo-ya Hotels & Resorts owner of such Waikīkī landmarks as The Royal Hawaiian and Moana hotels is gearing up for the final phase of a $1 billion upgrade project that would build the first new oceanfront hotel along the fabled beach in more than 30 years.

The aging Princess Kaiulani hotel also will gain a new tower, demolish two other hotel buildings and revamp an existing hotel tower in an extensive facelift.

The resort company expects to file the final environmental impact statement for the project this week, according to Kyo-ya executive vice president Greg Dickhens.

The new 26-story beachfront hotel would be built on the site now occupied by an eight-story hotel that is part of the Moana Surfrider, A Westin Resort. Dickhens said the new hotel would be managed as a separate entity.

It's likely that Starwood Hotels would continue to manage the property, which could be run under a luxury hotel brand, such as St. Regis or W Hotel, he said.

The resort company has been talking publicly about the extensive renovation project for the past two years and has won the support of the Waikīkī Neighborhood Board.

Dickhens said most of Waikīkī's hotels were built in the 1960s and 1970s. "It's tough to be competitive when your product is 30, 40, 100 years old."

Since the makeover plans first emerged, the company has changed from including a timeshare component to a hotel/condo-hotel/residential mix that includes 61 residential units in the top part of the new Pikake Tower at the Princess Kaiulani site.

The number of traditional hotel rooms would decline from a total of 1,140 to 937; the retail space would go from less than 25,000 square feet to 82,000; and the number of parking spaces will increase by 167.

This is the latest in a series of extensive renovations of the aging resort area, which anchors the state's No. 1 industry. Kyo-ya recently completed a makeover at the Sheraton Waikiki, and had previously done extensive renovations at The Royal Hawaiian and Moana.

Other large-scale projects in recent years include Outrigger's Waikiki Beach Walk, developed at a cost of $535 million, and Kamehameha Schools' $115 million remake of the Royal Hawaiian Center. Other new construction included the Trump Tower and Hilton's Grand Waikikian timeshare resort.

After the final environmental study is reviewed, Dickhens estimates an 18-month process to get the necessary government review and permits.

Waikīkī Neighborhood Board Chair Robert Finley said the project got approved by the citizen board because it proposes knocking down older buildings and simplifying traffic in a congested part of Waikīkī.

"During the recession, it's nice to see them spending money," Finley said. And those who live and work in the area said they like the idea of reducing traffic congestion on busy Ka'iulani Avenue.

He added that the buildings targeted for demolition won't win much support.

He said the Princess Kaiulani redesign gets rid of older buildings and moves the hotel entry traffic onto the property.

Finley said there are more questions and concerns about the new tower proposed along the shore near the Honolulu police station.

"That old building is so nasty looking," he said. "Getting it gone would be nice." But Finley said people are watchful of whatever will be built beachfront and will be paying attention during the government approval process.

"It's going to be right on the water, it's going to be taller than what's there now," Finley said.

He said he could understand some concern from the nearby Hyatt Regency Waikiki Beach Resort and Spa. "It would block part of their ocean view much like the Hyatt blocked part of the PK's view," Finley said.

Hyatt General Manager David Lewin said his company does not oppose the plan at the Princess Kaiulani part of the project: "It would be a great addition to Waikīkī. While the new tower will impact our 'ewa views, it is a good use of the lot and an upgrade to Kalākaua."

However, Lewin said Hyatt doesn't support the tower next to the Moana for two reasons.

"It does not meet the design requirements of the special district. The height and setback are in direct violation, especially the height," he said.

Dickhens said Kyo-ya is asking for approvals for variances for the project but proposing a taller, thinner design that includes a two-story, open-air entryway that it says will provide ocean views and other amenities that make it worthwhile and an improvement over the shorter "lot line to lot line" footprint of the old building.

Lewin said he thinks the tall tower won't win friends for the visitor industry.

"If approved, it will be another poor reflection on the industry in the eyes of the public," he said.

But Dickhens said the modern design, landscaped green space and increased areas accessible to the public make the overall project an improvement that is winning support.

If approved, Dickhens said he expects the net number of unionized employees to remain about the same in the future because running a new separate high-end hotel will require more workers while the residential units would eliminate positions.

Finley said Kyo-ya has been open to questions and concerns about the project and is proposing a plan that adds some elements that the community likes, including another public pedestrian access from Kalākaua Avenue to Waikīkī Beach; and a $500,000 contribution to the state's plan to replenish sand along the beach.

Dickhens said working with the community, including descendants of the Native Hawaiian families of the area, has been rewarding.

And that's how the project has evolved. "You can't just draw up a lot of pretty pictures and get it approved," he said.

Dickhens also highlighted the new public surfboard racks about 100 planned and the opening up of the view of the ocean views from Kalākaua.

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