A dilapidated condominium complex on state land along Hilo’s Banyan Drive may be in line for a $20 million makeover.

The Hawaii Board of Land and Natural Resources is expected to decide on Friday whether to award a contract to Hilo-based Banyan Drive Management to renovate the Country Club Condominium complex, a 152-unit property.

If the contract is awarded, the company plans to do a complete rehab of the building, which has had problems with squatters, vandalism and sabotage of the building’s equipment, according to a news release Thursday from the Department of Land and Natural Resources.

Banyan Drive Management has told DLNR that after renovating the building, it would like to operate it as a short-term transit hotel.

With the board’s approval, DLNR will negotiate a development agreement for the demolition, repair and renovation project, as well as a 65-year lease based on fair market rents.

Once the development agreement is negotiated and the rent is determined, DLNR’s Land Division will return to the board for approval. BDM also won approval for reduced current rent from $4,635.74 per month to $100 per month.

“This is a distressed property requiring a significant capital outlay just to maintain day-to-day operation. BDM has gone above and beyond the call of duty in managing the property under a month-to-month permit at a significant financial loss. The Land Division believes a reduction in rent is in the best interests of the state to facilitate continued operation of the property and avoid it becoming another Uncle Billy’s,” the Land Division wrote to the board.

The Country Club condos are one of six buildings on state land on Banyan Drive, which was once a tourist draw but has suffered urban decay in recent years.

Nearby is the former Uncle Billy’s Resort and Hotel which closed in 2017 and burned in a fire three years later. DLNR has asked the Legislature for at least $12 million for demolition of the building.

Earlier this month, three dozen armed officers swarmed Uncle Billy’s in a dawn raid that resulted in two arrests and 10 citations for trespassing. The former hotel has suffered numerous arson fires and other criminal activity since its closure.

Gordon Heit, Hawaii island land agent for DLNR, said in the release that he’d like to see Banyan Drive regain its former iconic status as a hotel and resort destination for the Big Island.

“I do have a vision, like many others, for Banyan Drive. I’d like to see it retain its former glory as a
resort/hotel destination for east Hawaii. I think it can be done,” Heit said.