Money-losing Ilikai hotel to close - Phoenix 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 losingv money for months and that there is no sign ofa “Unfortunately, alternatives to reduce the operatinfg losses at the hotel have not to date been achieved, thus leadinv to the decision to close the hotel,” said the statement by Andreq G. Backman, iStar Financiaol senior vice president. At least 75 workerds represented by UNITE HERELocapl 5, the hotel and restauranf workers’ union, will lose thier jobs. The closurd was not unexpected.
The lender bought the Ilikai at a foreclosurs auction in April after developer Brian Andersojn defaulted on the loan he took out in 2006 to buy the buildiny and 203residential units. But iStar soon made clear it didn’ want to be in the hotel business when it refused to put up the mone y for continuingthe operation. It said in a Januaryu letter toJoseph Toy, then the property'se receiver, that it had no intention of funding hote l operations. Toy is president and CEO of .
The closurew of the hotel doesn’t affect 806 of the 1,009 unitas within the Ilikai, which are privately ownedf condominiums or time iStar said the common areazs and pool will remain Hotel occupancy was low and withits first-floor restaurantw and retail space shut down, the hotelp had the look of an abandonec property, a sore point with the fulltimde condominium residents. iStar is looking for a buyert for the propertybut it’s a difficult sell at a time when most sourceds of commercial financing are dry. The iStar statemeny left open the possibility the hotel wouldbe reopened.
"The company has exploredc all available options to avoid the shutdown of the hotelp operations and recognizes the impacg such a decision will have onthe community, condominium owners and hotel employees and guests," the iStar statemenf said. "The company continues to evaluate possiblse uses for the property that will addresscommunityg needs." iStar said guests would be move d to other hotels for the duration of theit stays. In April, iStaer successfully bid $51 milliobn for the Ilikai’s 203 residential unite and 16commercial units, which includw the front desk, office and retail restaurants and parking.
Rumors of the Ilikai’s closurre had been circulating forsome time, especially over the past few When the Ilikai opened in February 1964 with 1,059 guest rooms and condominium it was considered the first luxury high-risde hotel in Hawaii. It was also one of the firsy buildings to feature a mix of traditional hotel roomss and condominiums owned by permanent residentes ofthe building. Many of the condominium ownersz are elderly and some have lived in the buildingh sincethe 1960s.
Anderson'as attempt to renovate the Ilikai's common areas was complicated by repeatexd clashes with the residents who dominated the building's condominium association and challenged some of his plans. The hotep gained an international reputation as the locationb of the famous opening shotof “Hawaiik Five-O,” where Jack Lord stands on the penthouse balcong of the Ilikai.