Hilo resort owner remains hopeful after state rejects lease renewal

Courtesy: Hawaii County

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The Naniloa Volcanoes Resort in Hilo will not be closing Monday. The state rejected a lease renewal for the hotel owner last week, but the owner still has hope the hotel can remain open.

The hotel owner owed $500,000 for the land lease at the Naniloa Volcanoes Resort. On Friday, the Department of Land and Natural Resources said the money was due Monday at midnight.

But even if that payment is not made, the hotel cannot be closed for at least a month-and-a-half. By law, employees must be given 45 days notice before they are laid off.

“If they ever did terminate the lease, before they could do anything, before they could put it up for auction or anything like that — or the bank — they would have to foreclose on the property. And just that alone would take some time,” Naniloa Volcanoes Resort Owner Ken Fujiyama said.

Fujiyama bought the hotel in 2006. He says the current occupancy is only 35 percent. In spite of that, the hotel cannot be closed within the next month-and-a-half.

“There is no way that we can close on that kind of a notice. We have obligations under state law to our employees, we have obligations to the folks who have reservations, and it’s an orderly, business-like process that we need to go through,” bankruptcy trustee David Farmer said.

“People are calling in and wondering, concerned about their reservations. Some have just cancelled. That will hurt our business,” Fujiyama said.

Fujiyama admits there have been problems with maintenance of the property.

“I should have painted the outside for a visual effect. I didn’t because we focused all our energies on the inside because it was a wreck,” Fujiyama said.

Related story: Jobs in jeopardy after state denies lease extension for Hilo resort

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