Local nonprofit labor welfare organization Unity House received final court approval to buy The Lotus at Diamond Head hotel in Waikiki out of foreclosure for $8.5 million last week.

The group had made an initial bid for the 51-room boutique hotel in August at a foreclosure auction, and no competing bids were made at an Aug. 17 confirmation hearing before a Circuit Court judge.

Unity House expects to complete its purchase by paying creditors in a couple of weeks. Jim Boersema, Unity House board chairman, said the hotel, managed by Castle Resorts & Hotels, will continue normal operations, though the labor organization is evaluating feasibility of converting the property to time-share or condominium use.

The Lotus, formerly the W Honolulu-Diamond Head, was forced into foreclosure after local developer Brian Anderson defaulted on mortgages tied to the property. First Hawaiian Bank and Central Pacific Bank were owed $11.3 million.

Anderson bought the hotel on a mix of fee-simple and leasehold land for $8 million five years ago.