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The Honolulu Advertiser
Posted on: Friday, September 15, 2006

Sheraton may join Waikiki makeover

By Lynda Arakawa
Advertiser Staff Writer

Sheraton hotels in Waikiki, including the oldest lodge on the storied beach, the Moana Surfrider, may soon undergo major upgrades, pushing the total value of recent private investments in the area to well over $1 billion.

The owners of the Sheraton properties are considering replacing the diamondhead wing of the Sheraton Moana Surfrider with a new hotel and tearing down part of the Sheraton Princess Kaiulani Hotel to make way for a new time-share tower.

Starwood Hotels & Resorts, which manages the four Sheraton hotels in Waikiki, described the plans as "conceptual" and declined to give a cost estimate yesterday. But the cost could be in the hundreds of millions of dollars, according to a hotel expert, who asked not to be identified because he is not directly involved in the Sheraton planning.

The tentative plan would be the latest in a string of redevelopment projects and upgrades changing the face of Waikiki:

  • Outrigger Enterprises Group's Waikiki Beach Walk project.

  • Trump Tower.

  • Hilton's Grand Waikikian.

  • Kamehameha Schools' renovation of the Royal Hawaiian Shopping Center.

    "This is just a real positive development for Waikiki," said Rick Egged, president of the Waikiki Improvement Association. "To continue to improve, we have to continue to offer more value and attract a higher-yielding visitor."

    Negotiators for Starwood and Kyo-Ya Co. Ltd., which owns the hotels, presented the tentative plan to its employee union, UNITE HERE Local 5, at a meeting last week that was attended by more than 100 workers.

    "We provided concepts and a vision of what we're looking at potentially for the future of our Waikiki product," said David Uchiyama, spokesman for Starwood in Hawai'i. He said there still needs to be an architectural assessment to see "if our concepts are viable," and said there is no timeline for the projects.

    "That's all contingent on being able to secure financing, secure the needed permits and approvals," he said.

    Uchiyama declined to say how much the plan will cost. But the several hundred million dollar estimate would be in line with the other hotel construction and renovation projects under way in Waikiki.

    NEW TIME-SHARE

    The tentative plan for the hotels includes the continued renovation of rooms and other areas at the Sheraton Waikiki, the Royal Hawaiian Hotel and the Moana Surfrider.

    The plans call for Sheraton to expand its current four properties to six five hotels and one time-share Starwood said in a negotiations update notice for employees.

    "The Princess Kaiulani will venture into a complete reshaping of the property," the update said. That would include demolishing Princess Kaiulani Hotel's Princess and Kaiulani wings and the swimming pool and nearby retail area. The space would be used for a new time-share tower with 240 two-bedroom units.

    TEMPORARY LAYOFFS

    The Ainahau Tower of the Princess Kaiulani would be completely renovated and become its own free-standing Sheraton hotel.

    The redevelopment of the Princess Kaiulani would involve the temporary layoff of some employees, but the company will work with the union to "provide an economic cushion" for affected workers and ensure they will return to jobs in the newly renovated properties, the notice said.

    Sheraton management and the union have been in contract negotiations since May. Employees are concerned about how they will be affected by the proposed changes, said a union spokesman.

    The Moana Surfrider's Diamond Wing may be replaced with a new, 200- to 250-room hotel, the notice said. The new properties may be flagged with a different Starwood brand like Westin.

    The original Moana Hotel, now the Moana Surfrider, opened in 1901 as the first major hotel on Waikiki Beach. The Princess Kaiulani opened in 1955 at the former entrance of the Ainahau Estate, once home to Princess Victoria Kawekiu Ka'iulani Lunalilo Kalaninuiahilapalapa.

    Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.

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