Hawaiian Waikiki Beach Hotel jobs hinge on auction
By Andrew Gomes
Advertiser Staff Writer
Almost 300 employees at the Hawaiian Waikiki Beach Hotel will be invited to reapply for positions at the 714-room property if the mortgage holder of the hotel emerges as its new owner as expected at a May 16 foreclosure auction.
Following the sale, local hotel operator Aston Hotels & Resorts plans to solicit applications, conduct interviews and make job offers contingent upon being contracted to manage the hotel, court-appointed receiver Patricia Kim Park said yesterday.
Also, there are no plans to close the two-tower hotel should about $30 million in anticipated renovations be made to it, she said.
Last week, the Hawaiian Waikiki's 274 workers, about 220 of whom are unionized, received notices that they would be terminated effective June 30.
The notices went out in anticipation of completing the auction and a hearing to confirm the sale by June 30.
New York-based financial services holding company Leucadia National Corp., through subsidiary Hawai'i Venture LLC, acquired the mortgage on the Hawaiian Waikiki last June from Mitsui Trust & Banking Co. Ltd. after hotel owner Otaka Inc. defaulted on an $85 million loan.
Whether Leucadia emerg-es as owner is not certain, but it is expected. The company, which is estimated to have paid around $30 million for the mortgage, is allowed to credit bid up to $85 million against the debt it holds on the hotel valued by the city at $67 million.
"It's not going to become clear who the new owner will be until the confirmation hearing," Park said.
Until confirmation and completion of a sale, there can be no contract to manage the hotel, she said.
Kelvin Bloom, chief operating officer of Aston, reserved comment, saying it would be speculative to talk about staffing plans at this point. Leucadia officials could not be reached yesterday.
Leucadia is a $715 million company with principal investments and operations in insurance, banking, mining, manufacturing and real estate.
The company's subsidiary, Hawai'i Venture, sued Otaka in August alleging that the struggling hotel operator diverted money from the Hawaiian Waikiki to support its money-losing Kona Surf Resort, which also is undergoing foreclosure proceedings.
The court last year appointed Park as an independent receiver to operate the Hawaiian Waikiki. Earlier this month, a judge ruled in favor of Leucadia, and ordered the hotel to be sold at foreclosure auction.
Aston has been working for Leucadia as a consultant to examine operations at the hotel as well as possibilities to reposition the property following foreclosure.
A roughly $30 million renovation of the Hawaiian Waikiki is planned to upgrade the hotel from an economy to mid-price accommodation, according to Aston.
