The transaction is expected to result in renovation of the 460-room hotel starting by June 2008, and no change in existing hotel employee union agreements.

Buying the Kona Beach Hotel is InvestWestFinancial/Pacifica Hotel Co. and a hui of real estate investors including local investors Joe Leoni and Timothy John Young.

InvestWestFinancial, is a 37-year-old firm that owns and manages commercial and residential real estate, including coastal California hotels through subsidiary Pacifica Hotel Co.

The Hawai'i investment group, IWF LLC, was led by Leoni and Young, president of the local investment and merchant banking firm Blackpoint Capital Advisors LLC. Other investors included Patrick Beach and Russell Geyser.

HTH Corp. was founded in 1975 by Kaua'i-born businessman Herbert Takami "H.T." Hayashi, who built one of the largest hospitality companies in the state and died in 2005.

Other HTH properties include the Pacific Beach Hotel in Waikiki and the Pagoda Hotel in Pawa'a.

Mike Barnard, Pacifica Hotel president, said the company is excited to be acquiring the unique and culturally rich Kona Beach Hotel.

"Pacifica has a long history of working closely with the communities in which we operate and of adding value to the hotels we own and manage," he said in a statement. "We intend to continue our positive and cooperative approach here, by honoring existing employee union agreements and by enhancing and upgrading the hotel while respecting the heritage of the site."

Barnard said Pacifica plans to announce specific renovation plans within the next few months.