State funds $14 million to demolish Hilo's abandoned Banyan Drive hotel

A $14 million state budget item moved Hilo’s abandoned Country Club Condominium Hotel closer to demolition, shifting one of Banyan Drive’s most visible eyesores from stalled redevelopment to cleanup.

The six-story building at 121 Banyan Drive, built in 1969 and vacant since early 2025, has become a costly liability for the shoreline corridor. The state’s executive supplemental budget transmitted to Gov. Josh Green included capital improvement project money for demolition, and another $1.2 million had already been appropriated this fiscal year for planning the razing and preparing the site afterward.

The new figure is far above a 2018 estimate that put demolition at about $6.2 million, a sign of how much the job has grown once utilities removal, site complexity and remediation are folded in. The building itself carries no appraised value, while the 1.16-acre shorefront parcel is appraised at $863,000, underscoring that the land now matters far more than the structure sitting on it.

State officials have already been spending to keep the property from turning into another public nuisance. The Department of Land and Natural Resources Division of Conservation and Resources Enforcement has provided 24/7 security to keep out squatters and vandals, a problem that also plagued the neighboring former Uncle Billy’s Hilo Bay Hotel before it was demolished. That site saw additional damage, including a fire that required a Hawaii Fire Department response after it was condemned as structurally unsafe.

The Country Club’s collapse into disuse also marked the end of a much larger redevelopment pitch. In 2023, Banyan Drive Management LLC had been tied to a roughly $20 million renovation concept that would have overhauled 152 residential units, the lobby, restaurant space, elevators, swimming pool, parking, driveway areas and landscaping. The plan envisioned a 65-year lease based on fair-market rents and operation mostly as long-term rentals, after Savio SB Growth Venture LLC withdrew because of lending-market conditions.

By January 2025, though, Banyan Drive Management told DLNR it was surrendering its revocable permit and would vacate by Feb. 2. At that time, state officials said five legal tenants remained and 16 rooms were still occupied.

What comes next for the wider Waiakea Peninsula is still being debated. The Banyan Drive and peninsula area covers about 101 acres of state-owned land managed by DLNR, and Mayor Kimo Alameda said in early 2025 that the derelict Country Club site and Uncle Billy’s should become public open space, while any future hotel development should be focused on the 62-acre Naniloa Golf Course parcel. State lawmakers have also pushed House Bill 2616 and Senate Bill 2001 to shift oversight to the Hawaii Community Development Authority, citing cultural stewardship, safety, lighting and pedestrian conditions. For Banyan Drive, demolition would not solve every problem, but it would finally remove a building that has long drained money, attention and confidence from Hilo’s tourism corridor.