Lawmakers seek HCDA control, Naniloa acquisition to revitalize Banyan Drive

Hilo’s Banyan Drive and the state-owned Waiākea Peninsula face an intensified push this legislative session to shift control from the Department of Land and Natural Resources to the Hawai‘i Community Development Authority, acquire the Naniloa Golf Course and accelerate redevelopment planning. Lawmakers have introduced at least five bills targeting the approximately 101 acres of peninsula lands, Gov. Josh Green released $1 million for master planning, and demolition of the condemned Uncle Billy’s Hilo Bay Hotel entered its second and final phase with an estimated completion date of January 2026.

Two bills outline competing governance approaches. House Bill 2616 would create a Banyan Drive-Makaokū Community Development district under HCDA, request $2 million for an environmental assessment and fund a full-time staffer, and specify board membership that includes two Hilo representatives, a lineal descendant, a cultural specialist and the county director of planning. House Bill 818, co-introduced by Sue Keohokapu-Lee Loy and Matthias Kusch, proposes a Waiakea Peninsula Community Development District under HCDA with a special fund and a board of up to nine members, and as written would transfer management of Waiākea lands to HCDA by the end of 2025. Former Representative Richard Onishi asked lawmakers to consider moving that transfer deadline to the end of 2026; Keohokapu-Lee Loy said she would take the recommendation under advisement.

Lawmakers are also pursuing property-level tools. A bill introduced by Inouye would authorize state acquisition of the Naniloa Golf Course to position the site as a redevelopment centerpiece. Legislators have framed the urgency partly around Hilo’s tourism economy and the Merrie Monarch festival; Civil Beat reporting noted proposals to build a hotel at Hilo airport to house festival visitors while Banyan Drive revitalization proceeds. Keohokapu-Lee Loy framed the moment bluntly: “The way (redevelopment) was being done in the past, it’s not working, so we just got to try a different way,” and she added that after years of slow decay people are “done having conversations, and now it’s time for action.”

Governance and agency roles remain contested. Civil Beat reports DLNR submitted testimony supporting an HCDA/district measure, citing the potential to address significant redevelopment costs. A public meeting transcript shows a contrasting remark that DLNR was “not in favor of this” in the context of House Bill 2578 HD1, which would designate redevelopment guidelines and specifically call out Waiākea Peninsula; the transcript also records discussion that the county’s Banyan Drive Redevelopment Agency had verbally committed to sunset itself if state legislation takes effect. The transcript further records that DLNR is moving forward with a request for qualifications and request for proposals for Uncle Billy’s and the Hilo Country Club properties, both currently on month-to-month leases, and that those procurements were scheduled to be presented to the state land board in the near term.

Planning work is beginning in parallel. Big Island Now reported Gov. Josh Green released $1 million for feasibility and master planning on July 26, 2025, and DBEDT has selected a Hawai‘i-based consultant but has held contracting pending release of the Capital Improvement Projects list. HCDA Executive Director Craig Nakamoto said the agency will test uses and infrastructure needs during planning: “People see the potential in Banyan Drive. If there could be development, it means more economic development for the area and the island.”

Next steps include committee action on HB2616, HB818 and related bills, contracting once CIP clearance arrives, land board review of DLNR’s RFQ/RFP responses for Uncle Billy’s and the Country Club, and continued public meetings as technical studies on sea level rise, infrastructure and economic capacity are integrated into the master plan. With five bills on the table and $1 million now released, legislators and agencies are moving from long-running discussions toward specific statutory and procurement actions affecting Banyan Drive’s future.