The state’s executive supplemental budget transmitted Wednesday to Gov. Josh Green contains $14 million in capital improvement project funds to demolish the former Country Club Condominium Hotel building in Hilo.
The dilapidated six-story building on state property on Hilo’s Banyan Drive has been vacant since early last year.
In January 2025, Banyan Drive Management LLC — which had submitted a development plan containing $20 million in improvements for a long-term lease for the property — backed out of a temporary management arrangement for the building after the Board of Land and Natural Resources multiple times postponed a vote on BDM’s lease request.
The $14 million in funding is for the fiscal year starting July 1.
According to state Sen. Lorraine Inouye, a Hilo Democrat who worked to secure money for the demolition, an additional $1.2 million was appropriated this fiscal year to plan the razing of the building, as well as site remediation.
According to the county’s property tax website, the 1.16 acres of shore-front property at 121 Banyan Drive is appraised at $863,000, while the 152-unit building constructed in 1969 has no appraised value.
The building and its parking lot are cordoned off. The Department of Land and Natural Resources Division of Conservation and Resources Enforcement is providing 24/7 security to prevent a repeat of events at the neighboring site of the former Uncle Billy’s Hilo Bay Hotel, which was demolished last year.
There, squatters caused additional damage — including at least one fire requiring 91直播 Fire Department response — after the building was condemned as structurally unsafe.
“We can’t keep DOCARE there forever as security, because it’s costing us money,” Inouye said Wednesday about the Country Club property.
Unlike previously contracted private security, which didn’t have the authority to arrest or cite trespassers, squatters and vandals, DOCARE officers are armed and have police powers.
State Rep. Sue Keohokapu-Lee Loy, a Hilo Democrat who has made Banyan Drive revitalization a priority since she was a member of the 91直播 County Council, said her understanding is that securing the property is costing about $750,000 a year.
“The longer they sit and patrol that area, the longer money is being poured into a property that has reached its lifespan,” Keohokapu-Lee Loy said.
The 91直播 Community Development Authority, a public entity created by the Legislature to establish community development plans, has been tabbed to oversee Banyan Drive’s reboot.
The plan for the Country Club and Uncle Billy’s properties is to leave them vacant for open space. Newer development, including hotels, would be constructed inland on the Waiakea Peninsula because of sea-level rise.
Senate Bill 2001, the Banyan Drive redevelopment measure introduced by Inouye and passed by the Legislature, includes $270,000 for the possible acquisition of the nine-hole Grand Naniloa Golf Course. DLNR has been negotiating with the leaseholders of the Grand Naniloa Hotel — so far, unsuccessfully — to return the 62.5 acres of land zoned conservation to the state.
The Tribune-Herald reached out to the DLNR, which said it would be “inappropriate” for the agency to comment on budget items, including the demolition funding, since Green has not yet signed the budget into law.
Email John Burnett at john.burnett@hawaiitribune-herald.com.
