Starwood to reopen Kona Surf in 2003

By Andrew Gomes
Advertiser Staff Writer

Starwood Hotels & Resorts has agreed to manage the former Kona Surf Resort & Country Club under Starwood's Sheraton brand when a new owner reopens the abandoned hotel as expected in 2003.

The Kona Surf Resort & Country Club, now vacant and run down, will undergo a $40 million renovation before it reopens in 2003 under Starwood management. Advertiser library photo • June 2001

Koa Hotel, in announcing the deal yesterday, said it expects to rename the 30-year-old Kona Surf after conferring with kupuna in the area.

Keith Vieira, senior vice president for Starwood in Hawai'i, estimated that 400 full- and part-time jobs will be created by reopening the 535-room hotel in Keauhou.

Another 235 construction jobs will be created for the estimated $40 million rehabilitation that is anticipated to take a year, said Jim Salter, chairman and chief executive officer of construction management firm CM&D in Honolulu.

The Kona Surf was closed more than a year ago by Otaka Inc., which was hit with a foreclosure suit in December 2000. About 215 employees were laid off.

Koa Hotel became the plaintiff in the case in July when it acquired the mortgage from another investor who acquired the $30 million note last year from original lender Chuo Mitsui Trust & Banking Co. Ltd.

Koa Hotel is expected to apply its mortgage as a credit bid to acquire the property at an upcoming court auction. The company still must amend the Kona Surf's ground lease with landowner Kamehameha Schools, which has been working with Koa Hotel and expects to reach terms.

Hawai'i County Mayor Harry Kim has encouraged the reopening as soon as possible, and said in a statement yesterday: "This is a special place and (the hotel's) reopening will be a wonderful event."