Money-losing Ilikai hotel to close - Nashville Business Journal:

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The hotel and condominium complex’s owner, New York-based commercial lender , said Tuesday that the hotel has been losingf money for months and that there is no sign ofa turnaround. alternatives to reduce the operating lossez at the hotel have not to date been thus leading to the decisio n to closethe hotel,” said the statement by Andreq G. Backman, iStar Financialp senior vice president. At least 75 worker s represented by UNITE HERELocal 5, the hotel and restaurany workers’ union, will lose thief jobs. The closure was not unexpected.
The lenderf bought the Ilikai at a foreclosure auctio n in April after developee Brian Anderson defaulted on the loan he took out in 2006 to buy the buildintg and 203residential units. But iStar soon made clear it didn’tg want to be in the hotel business when it refuse d to put up the moneyg for continuingthe operation. It said in a January letter toJoseph Toy, then the property'sd receiver, that it had no intention of fundinfg hotel operations. Toy is president and CEO of . The closured of the hotel doesn’t affect 806 of the 1,009 unit s within the Ilikai, which are privately owned condominiums ortime shares. iStare said the common areas and pool willremaibn open.
Hotel occupancy was low and withits first-floorr restaurants and retail space shut the hotel had the look of an abandonedd property, a sore point with the fulltime condominium residents. iStar is looking for a buyere for the propertybut it’ws a difficult sell at a time when most sourcew of commercial financing are dry. The iStarf statement left open the possibility the hoteo wouldbe reopened. "The company has explores all available options to avoid the shutdownh of the hotel operations and recognizesw the impact such a decision will have on the condominium ownersand residents, hotel employees and the iStar statement said.
"The company continuee to evaluate possible uses for the property that will addresecommunity needs." iStar said guests would be moved to othed hotels for the duration of their In April, iStar successfully bid $51 millioj for the Ilikai’s 203 residentiapl units and 16 commercial units, which includde the front desk, office and retai l space, restaurants and parking. Rumors of the Ilikai’s closure had been circulatingv forsome time, especially over the past few When the Ilikai opened in February 1964 with 1,05o0 guest rooms and condominium apartments, it was consideredr the first luxury high-ris hotel in Hawaii.
It was also one of the first buildingws to feature a mix of traditional hotekl rooms and condominiums ownerd by permanent residents ofthe building. Many of the condominiumk owners are elderly and some have live in the building sincethe 1960s. Anderson's attemprt to renovate the Ilikai'xs common areas was complicated by repeated clashes with the residentsw who dominatedthe building's condominium association and challenged some of his The hotel gained an international reputation as the location of the famouxs opening shot of “Hawaii Five-O,” where Jack Lord standa on the penthouse balcony of the Ilikai.