Terrace Hotel switching to condo

By Kelly Yamanouchi
Advertiser Staff Writer

The 32-year-old Waikiki Terrace Hotel is the latest hotel undergoing conversion to a condominium.

The hotel is being renovated at a cost of $11 million and will reopen in April as the Outrigger Luana Waikiki.

Japanese owner Max Holdings Inc. is selling the hotel to Waikiki Terrace LLC, a newly formed company owned by affiliates of Max Holdings and landowner National Housing Corp. of Hawaii Inc.

Sale of the Waikiki Terrace, a 17-story, 242-room hotel at 2045 Kalakaua Ave. next to the Fort DeRussy park, is expected to be completed Dec. 29. Terms of the sale were not disclosed.

The new owner is hiring Outrigger Hotels & Resorts to manage the property. Outrigger has managed other properties for National Housing.

About 50 employees at the property will lose their jobs with Castle Resorts & Hotels, the current hotel manager. Outrigger plans to interview the employees for jobs at the new condo operation.

The property will continue as a hotel during the renovations. The changes will cover the guest rooms, lobby, mezzanine level, fitness room and pool deck with work set for completion in June.

The Outrigger Luana Waikiki will have 186 studio suites, 29 one-bedroom suites and two two-bedroom suites. Outrigger will add the property to its 10 condominium resorts on O'ahu, Maui, Kaua'i and the Big Island.

Castle Resorts president and chief executive Rick Wall said the company is sorry to lose the property. He said the switch is not related to arbitration completed earlier this year between Castle and Max Holdings over Castle's revenue obligations after the Sept. 11 terrorist attacks.

Reach Kelly Yamanouchi at 535-2470, or at kyamanouchi@honoluluadvertiser.com.