BLNR Cancels Possible Sale of Former Country Club Condominium Hotel

The state will not sell the former Country Club Condominium Hotel to a new owner, even if it seeks a new tenant for the property.

In July, the Board of Land and Natural Resources voted to solicit proposals from potential new tenants of the Country Club property, after current tenant Oceanfront 121 announced it would no longer be able to manage the property. after this year.

Rather than letting the property revert to the management of the Department of Lands and Natural Resources, new tenants will be able to submit proposals for improvements to the aging 152-unit building and demonstrate their financial capability. The chosen lessee could be granted a lease for up to 65 years.

However, the BLNR on Friday approved an amendment to that solicitation, after discovering that the wording of the request for proposals suggested that the approved tenant would purchase the former hotel.

“We were about to publish our Country Club (request for proposal and qualifications), when we realized that a document contained a provision that the (DLNR) would potentially sell the improvements made to the property,” said Russell Tsuji , administrator of the land division of the DLNR. .

Tsuji said that after conversations with the state’s attorney general, he was unsure if DLNR was legally allowed to sell the hotel – which is on state land – to a new tenant, he therefore felt it best to remove the problematic language entirely to avoid complicating the matter.

Tsuji acknowledged that, generally, state practice is to require the previous tenant to remove all improvements to a property upon release of a lease. However, due to the size of the old Country Club, he said that would be impractical in this case.

Kevin Moore, deputy administrator of the Lands Division, said the division’s first recommendation for the building was its demolition.

However, the cost of demolishing the building was estimated in 2018 to be over $6.2 million. In a July report, the Lands Division estimated that due to inflation and rising contract costs, that price jumped to more than $10 million in 2022.

On the other hand, Moore said, retrofitting the building to meet county and state codes will also be very expensive.

Moore said potential tenants could still choose to demolish the building, but noted that would also trigger the need for another environmental assessment, unlike site renovations.

But in any case, no new tenant will be awarded the lease without making a big investment.

“In this case, the Country Club, we had various studies … where we studied the building and it had a very short-term useful life,” Tsuji said. “Frankly, it’s pretty much at the end of its useful life. It needs major renovations and improvements.

Email Michael Brestovansky at mbrestovansky@hawaiitribune-herald.com.