Hilton repair estimate now $40M
By Andrew Gomes
Advertiser Staff Writer
The cost to repair mold damage at two Hilton Hawaiian Village hotel towers has doubled again, to $40 million, according to Hilton Hotels Corp.
Two weeks after increasing its repair estimate from $10 million to $20 million, Hilton disclosed in a footnote to a filing with the Securities and Exchange Commission on Tuesday that the job will likely cost $20 million more.
The added expense, Hilton said, is for replacing furniture in Kalia Tower guest rooms and making improvements to Kalia Tower and to the Lagoon Tower, where mold exists on hallway ceilings.
Hilton, as it has before, noted that actual costs "may vary from these estimates."
Hilton officials would not say whether the estimate could rise again.
A Hilton Hawaiian Village spokesman referred questions to a Hilton spokeswoman in Beverly Hills, Calif., who said she could not provide any information beyond what was included in the filing.
The filing did not say what kind of building improvements will be made, or whether consultants have identified the cause of the mold.
The expected mold correction bill now stands at just over 40 percent of what it cost to build the $95 million Kalia Tower, which opened a little more than a year ago.
Hilton said in the filing that it is trying to recover mold repair costs and lost revenue from the business interruption under its property insurance policy, but noted that insurance carriers have not "taken a position as to whether the insurance coverage is available."
Two weeks ago in a conference call with stock analysts, Hilton said it was pursuing "third parties" to recoup mold cleanup costs.
From July to September, Hilton incurred expenses of $7 million working on mold in Kalia Tower and $3 million at Lagoon Tower hotel/time-share property, according to the filing.
Of the additional $20 million in anticipated cleanup expenses, Hilton estimates that it will spend $6 million this year and $14 million next year, the filing said.
Kalia Tower's guest rooms, which have been closed since July, are expected to reopen between April and June, Hilton said. Other parts of Kalia Tower and all of Lagoon Tower remain open.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
