Renovation work has begun in earnest to attract new tenants to the Waiakea Villas commercial complex in Hilo, Peter Savio said Tuesday.
Renovation work has begun in earnest to attract new tenants to the Waiakea Villas commercial complex in Hilo, Peter Savio said Tuesday.
Savio, a Hilo-born, Honolulu real estate developer, bought the 5.5-acre commercial property on Wailoa Pond for $2 million earlier this year, from California-based Owens Mortgage Investment Fund. Owens had foreclosed on the mortgage of prior owners Waiakea Waterfront LLC and Hoolulu LLC and reclaimed the property in a foreclosure auction.
“The buildings are actually in pretty good condition, but we’ve cleaned it up,” Savio said Tuesday. “We’ve still got close to another $100,000 or $200,000 worth of upgrades to do, just to the buildings themselves.”
Dana Kenny, principal broker at Hawaiian Island Homes — part of the Savio group of companies — said much of the 22-space, 80,000-square-foot complex is ready for tenants.
“We went through it, space by space,” Kenny said. “We cleaned it out, removed the flooring, vacuumed cleaned it, did the windows and made it ready to move into. We’ve gone through about 80 percent of it and made it ready to go. We fixed everything that was broken. We also sent a crew of 10 guys out there and the last three days we’ve been cleaning the grounds and bringing it up to what it was in its original heyday.”
The only signs of business in the complex early Tuesday afternoon was at Aloha Beauty Productions, but Hale Inu sports bar, a longtime tenant, is also still in operation.
Kenny said the only building on the property not ready to lease is the largest, a former hotel restaurant building which most recently operated as Uncle Mikey’s nightclub.
“We’re trying to schedule a time to work on that. We figure three days and we’ll have that spotless again,” he said. “The biggest part of it is — and people aren’t aware of this — we’ve got the two stories above ground (and) there’s one story that’s underground. … Everything that needed to be stored in the past 30 years, including when it was still a Sheraton hotel, is stuffed down there. That building and that basement was the original convention center, room service, laundry and housekeeping for the original 450-unit hotel.”
Savio said it will cost about $200,000 to $300,000 to get the units into “rentable condition” and potential upgrades could be “up to $1 million.” He called the former hotel restaurant building “the premier space.”
“We’re trying to find a restaurant operator for that,” he said. “But that’s where a lot of money will be going to fix up. That’s the building that I think has the greatest potential.”
There’s another restaurant space on the property, as well, the former Topo Gigio’s and Aunty Yong’s.
“We’re working with two (possible tenants) and the first one that comes in with the numbers will take the space,” Kenny said.
Both Savio and Kenny said they’re also hoping to lure professional clients, such as doctors, lawyers and accountants, to open offices in the complex. Kenny said that Day-Lum Rentals & Management is still handling property management and both Day-Lum and Hawaiian Island Homes are handling lease arrangements.
“Right now, we’re offering extremely favorable rents for the first tenants that move in, just to get some life into the place,” he said. “We’re talking about free rent for the first three months, CAM (common area maintenance fees) only for two to three months, low reduced rent for the next three months, continued reduced rent for the next six months, and after a year, going up to what the market value rent will be.”
Savio said he’s still in negotiations to buy the 275-unit residential portion of the Waiakea Villas property, which has separate ownership. He told Stephens Media Hawaii last month that he is willing to spend $25 million to develop a local-style hotel similar to the Pagoda Hotel in Honolulu, which he owns.
“We’re doing our due diligence,” he said. “We can build a hotel on the commercial property, but I’m more inclined to buy the (residential) property and put it back together. I just love the property. I think it’s unique, one of a kind.”
Email John Burnett at jburnett@hawaiitribune-herald.com.