The iconic Ilikai Hotel in Waikiki will reopen on Friday under new management, according to an announcement yesterday by hotel owner iStar Financial.

The 203-unit hotel was closed by its former operator on July 9, but iStar Financial's subsidiary SFI Ilikai Property Owner decided to reopen the hotel after reaching agreement with the hotel workers union.

That agreement with UNITE HERE Local 5 provides for the rehiring of about 50 employees, some of whom have been with the hotel for more than 30 years.

"iStar Financial would like to thank the union and its members for their commitment to find ways to help us provide the continued employment opportunities we all desire," said Andrew G. Backman, iStar Financial's senior vice president of investor relations and marketing. "We all share in the desire to preserve this iconic property for the community."

"We would like to thank the local community, the travel industry and guests for their support during this transition period," said Ike Cockett, general manager of the Ilikai. "We were all touched by the many past, present and future guests who called to express support."

Hotel Management Services LLC — a subsidiary of Aqua Resorts & Hotels — will manage the hotel.

"We are excited about this opportunity to work with Ike Cockett and his dedicated team to play a role in returning the Ilikai to its position as a landmark lodging option in Waikiki," said Bill Henderson, vice president of development for Aqua Hotels & Resorts.

The Ilikai was built in 1964 by developer Chinn Ho and designed as part residential condominium, part hotel. The hotel earned its place in pop culture history in the opening credits to the long-running TV show "Hawaii Five-0."

Henderson said meetings with employees began Monday. "We're going to take on everybody we can," he said.

In recent months, the hotel had dropped below 50 percent occupancy. Henderson sees the Ilikai with its large units and great views as a good fit for the small hotel chain, known for a boutique approach to hotel management.

He said boosting occupancy could mean they'd have to hire more people.

Currently, the hotel runs 203 rooms but he said the company is interested in taking over management some of the other units in the future.

Still, Henderson is optimistic about the units they already manage. "Most of the rooms are the best rooms in the hotel," he said, explaining they are located on the top four floors, with large rooms.

Local 5 spokesman Cade Watanabe praised the re-opening as a positive step for union members and for the community even though some details need to be worked out.

"We're definitely looking forward to working with them," Watanabe said. "The one thing that our members have wanted is to be part of the Ilikai's future ... and working even harder to make the hotel a success."

iStar noted agreements with Local 5 and Aqua Hotels & Resorts will not by itself ensure the long-term viability of the hotel and that the benefits of a more efficient hotel operation need to take effect along with an overall improvement of the world economy and the Hawai'i tourism industry.

In addition to retail and commercial space, the Ilikai complex consists of 1,009 total units, some occupied by full-time residents and some by time shares, as well as the 203 units used for hotel operations. The reopening only affects the hotel units. The remaining 806 units are not affected.

Earlier, the hotel had employed 75 union members but said that it would not be continuing food and beverage operations, which resulted in needing 25 fewer employees.

iStar is a publicly traded real estate investment trust that's not in the hotel management business. The company's subsidiary, iStar FM Loans LLC, acquired the $141 million mortgage on the Ilikai in 2007 from Fremont Investment & Loan.

iStar took ownership of the hotel portion of the campus from developer Brian Anderson's Anekona Development through a foreclosure suit filed in August 2008 after Anekona defaulted on the loan.

According to iStar's foreclosure lawsuit, iStar was owed about $72.7 million at the end of October on loans that Anderson defaulted on.

Managers say guests who have reservations should expect a smooth transition to the new management. The Ilikai is also taking new reservations.

Guests with questions, or those who would like to make reservations, may call the hotel at 808-949-3811 or toll free at 866-406-2782. Reservations may also be made online at www.ilikaihotel.com.