HomeMy WebLinkAbouttower-hbh proposal (003)TWE~DE ELORMENT
April 30,2018 ~,,
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Suzanne Case,Chairperson •-o
Russell Tsuji,Land Administrator —
Gordon C.Heit,Compliance Officer
Members,Board of Land and Natural Resources
1151 Punchbowl Street
Honolulu,Hawaii 96813
Mailing Address:
DLNR Land Division
Attn:Banyan Drive RFI
1151 Punchbowl Street Room 220
Honolulu,Hawaii 96813
Re:Banyan Drive Hotel Request for Interest -RFI No.BDH-1-FY18 (“RFI”)
Aloha Madam Case and Messer’s Tsuji and Heit,and Board Members:
Tower Development Inc.(“TDI”),the current lessee for the Uncle Billy’s property
(“Uncle Billy’s”),is honored to submit this Response to the RFI.As you are aware,TDI has
completed the redevelopment of the Grand Naniloa Hotel,a Doubletree by Hilton (“Grand
Naniloa”or “Hilton”).
TDI has used good faith for 9 months to save DLNR significant costs (likely over $100,000)in
securing the Uncle Billy’s grounds from vandalism and negative impacts after its closure.TDI has
the greatest interest in Banyan Drive and is committed to assist in the full redevelopment of
Banyan Drive at the same standards as the Hilton.Thus,we are confident that TDI is the
appropriate,and qualified Hawaii developer to complete the demolition,and re-construction of
the site.
Through its extensive 20-year Hawaii experience in development,demolition,environmental
remediation,construction and financing,and 4-year development experience specifically on
Banyan Drive,TDI is excited to continue the success with Uncle Billy’s redevelopment.For the
last two (2)years,and also during the nine (9)months since TDI was issued the RP 5-7905 for
Uncle Billy’s,we have been patiently planning for the redevelopment and have procured the
most qualified team to complete the project for the benefit of DLNR and the County,State,Hilo
and the surrounding community.
ci’
93 Banyan Dr.,Hug,Hawaii 96720 www.towerdevcon.com
April 30,2018
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FORMAL RESPONSE to RFI:
RESPONSE 6.A.—B.:
Responder’s contact information,and Principals (as defined in the RF1 document):
Principals Owning More than 5%of TDI:
Edward L.Bushor Stuart L.Miller
Chief Executive Officer President
Tower Development,Inc.Tower Development,Inc.
1050 Bishop,Suite 530 93 Banyan Drive
Honolulu,HI 96813 Hilo,HI 96720
Ph:808.268.1903 Ph:808.365.2665
Ed@TowerDevCon.com Stuart@TowerDevCon.com
Corporate Directors &Officers:(In addition to the CEO,and President above)
Noel Ross Lynn Bushor
Vice President Treasurer &Secretary
Tower Development,Inc.Tower Development,Inc.
93 Banyan Drive 1050 Bishop,Suite 530
Hilo,HI 96720 Honolulu,HI,96813
Ph:808.430.0384 Ph:808.333.3388
Noel@TowerDevCon.com L nn TowerDevCon.com
RESPONSE 6 C..
TDI and its officers and principals have 20 years of Hawaii real estate development experience in
commercial projects.We have acquired and successfully redeveloped office high rises,multiple
hotel properties,industrial projects as well as over 400 acres of land for residential,hotel,
timeshare,condominium,retail and golf course uses.The aggregate value of the Hawaii
developments exceeds $500,000,000.Our company philosophy is to assist communities in the
redevelopment of legacy projects and return the Hawaii lands to the needed uses for the
community.Thus,we focus on redevelopment of existing hotel and other structures,some of
which have abatement issues with hazardous materials and major construction challenges.
Case Study:
Grand Naniloa Hotel —TDI,through its affiliate,WHR,LLC successfully completed the
demolition,hazardous materials abatement,renovation,repositioning,branding,and
successfully operates the hotel,collectively defined as the Redevelopment of the Naniloa.TDI,
employed over 250 construction workers,of which 235 were Hawaii residents in the
redevelopment,and the hotel currently employees in excess of 220 full time employees.We
have made a meaningful impact on Hilo,and the surrounding communities by creating hundreds
of jobs and millions of dollars financial impact for the island and the State.The hotel is
performing very well,and was recently in the press with the sponsorship of the 55th annual
Merrie Monarch Festival,and the return of the Hokule’a to the Naniloa after departing from the
93 Bonyan Dr.,HUb,Hawaii 96720 www.towerdeveoncorn
April 30,2018
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Naniloa four years ago.TDI has invested approximately $SOM into the Naniloa,has a long-term
vision for Banyan Drive.TDI has deeply rooted and vested interest in the Hilo community,and is
committed to see through the entire Banyan Drive redevelopment parcel by parcel.
See attached Exhibit B,resume for details on Hawaii specific experience,and Exhibit C for
references.
RESPONSE 6.D.
Proposal for the Subject Site:
See attached Exhibit A for a conceptual Rendering of the proposed development
After extensive consultation with 3~party experts,commissioning of feasibility studies,research
and underwriting,and as the only developer to successfully,and completely re-develop a hotel
asset Banyan Drive,our conclusion is the sites highest and best use is to substantially demolish
and reconstruct a branded hotel consisting of approximately 125 guest rooms,fitness room,
appropriate back of house (“BOH”)spaces and a food and beverage venue along Banyan Drive.
Substantially similar to the Grand Naniloa,TDI will hire Hawaii contractors and sub-contractors
for the proposed development and will partner with a globally recognizable brand such as
Hilton,Marriott,IHG or Hyatt.TDI is currently in discussions with the global brands and is in the
process of select its brand.
RESPONSE 6.H.
Details of the New Hotel:
The new hotel product will comply with all State and County building codes and will contain and
consist of the following:
Number of Buildings:Currently there are 5 buildings and wings on the subject site.TDI will be
reconstructing 2-3 buildings,which will consist of a Lobby /Retail!Restaurant /Laundry /BOH,
structure connected to two guest room wings.
Guest Rooms:125 subject to final architectural,and brand approval.
Stories:4
Restaurants:1 Food and Beverage venue
Retail:1 sundries shop to include sundries items normally found in a Hawaii hotel as well as a
diverse selection of Island of Hawaii handmade items and art (see the Naniioa’s gift shop for an
example of what is proposed).
Parking:There is not adequate parking on the subiect site for a hotel.TDI is the only Responder
to provide unlimited parking on the Grand Naniloa 70-acre site.TDI will enter into a long-term
agreement with the Grand Naniloa for parking and valet services to comply with current building
codes,and hotel customer expectations to allow for a minimum of 200 stalls to meet building
code,guest and employee requirements.
Building Height:Substantially similar to existing
Setbacks:As required by the County Planning Department.
Floor Area:Approximately 100,000 square feet,subject to final architectural and brand
requirements.
93 Bunyan 0’.,Hilo,Hawaii 96720 www.Iowerdeveon.com 3
April30,2018
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Swimming Pool:The existing pool will be fully renovated and left in its current location.
RESPONSE 6.I.:
Project Design &Aesthetics:
The project will be designed to fit into the natural beauty of the Waiakea peninsula,Banyan
Drive,the greater Hilo area,and Hamakua Coast.TDI prides itself on being a sustainable
developer,and to embody,and incorporate the elements of the surrounding areas.We will
implement design ideas,elements such as recycled and repurposed elements from the site such
as milling fallen trees into furniture,and the overall design.This project is no different than the
Grand Naniloa,where we seek to implement design aesthetics from the past,with a modern
flare and a strong emphasis on cultural sensitivity,and the historical significance of the site.TDI
will be working with a designer (already selected)that has a world class boutique design
approach with over 30 years of high-end hotel/hospitality and resort design experience.TDI’s
selected design studio is comprised of the industry’s most talented multinational designers who
excel in the field of interior design,with worldwide exposure and experience.The designers
have been responsible for designing over 100 hotels,over 10,000 guestrooms,timeshare units,
and numerous resort public areas across the U.S.and 6 different countries with extensive
experience in Hawaii and have received many awards and accolades for their design.
RESPONSE 6.J.&K.:
Required Lease Duration:
To appropriately capitalize,and develop the subject site,TDI will require a 65-year lease at
market terms.
TDI will contribute $1.5M toward site demolition and site work for removal of existing structures
and remediation of existing improvements.
TDI will require a Rent Credit for any amount in excess of that amount not to exceed the
difference between $5,300,000 and $1,500,000,meaning $3,800,000 as a maximum rent credit.
This rent credit will be the offset for the demolition,and remediation of the existing
improvements.
Grant to County Park Land for Park and Parking Uses.
TDI shall,in consideration of the new ground lease grant to County 2 acres for “County Park
and Parking Uses”in area of land across from Reeds Bay Beach Park,which the County has a
need for in order to assist the Nib community to provide better access and parking for park
lands along the Hilo Bay.
RESPONSE 6.1.:
Financing and Capital Stack of the Proposed Development:
Financial wherewithal is based on the current structure of the Grand Naniboa,and the current
construction lender of the Grand Naniboa.TDI will finance the project with a mix of equity
capital,and a low leverage leasehold mortgage.It is anticipated that the capital stack for this
project is substantially similar to the Grand Naniboa,which was funded with approximately 60%
93 Banyan Dr.,ifilo,Hawaii 96720 www.towerdevcon.com 4
April 30,2018
Page 5
cash and a low leverage mortgage of approximate 40%of project cost.The equity capital will
come from TDI’s investment fund,and it is assumed that TDI will use its current Naniloa lender
for the low leverage construction loan.Our lender is the only lender familiar,and comfortable
with the DLNR’s lease structure,the Hilo market,and borrower.As such,it has given initial
approval to fund the subject development.
Cost and Time Estimates for the Development (quoted in USD,I:
RESPONSE 6.E.:
EA -5-6 months,at a cost of $45,000;if EIS is required,add 2-4 months and $55,000.
RESPONSE 6.G.-
Consolidation of the 4 parcels into one is a 6-10 month process at a cost of approximately
$50,000.
RESPONSE 6 F
Phase 1 Demolition and site preparation —approximately 6-12 months at a cost of
approximately $5,300,000.
RESPONSE 6.H.:
Phase 2 Development of a new hotel —approximately 12-18 months (there will be overlap with
Phase 1)at a cost of approximately $28,500,000.
Total Project cost of approximately $38,500,000.
See attached Exhibit B&C project schedules.
Detailed Budgets,and schedules are of a confidential nature and may be reviewed by the State,
~f TO!is selected as the developer for the subject project.Assumes industry standard permit
approval process.
Any cost and time estimates provided in response to this RFI are acknowledged to be estimates
only,and are non-binding on the Responder,TDI or the State of Hawaii and are subject to the
final review and approval of the legal counsel of the Responder,TDI and the State of Hawaii,
and a fully executed Lease agreement for the subject site.All negotiations and all
documentation prepared in connection with such negotiations shall be nonbinding upon either
party with the exception of a fully executed Lease document.
Respectively,
S r
Edward L.Bushor Stuart L.Miller
Chief Executive Officer President
Tower Development Inc.Tower Development,Inc.
cc:
Kevin E.Moore,Department of Land and Natural Resources
Michael L.Lam,Esq.,Case,Lombardi and Pettit
Mayor Harry Kim,Island of Hawai’i
93 Bunyan Dr.,Rile,Hawaii 96720 www.lawerdevcon.com
April 30,2018
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EXHIBIT “A”
UNCLE BILLY’S PROPERTY
REPRESENTATiVE IMAGES ONLY
HEIGHT AND FOOTPRINT CONSISTANT CURRENT IMPRO VEMENTS
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“LOBBY/FRONT DESK”
93 Banyan Dr.,Hilt,,Hawaii 96720 www.gowerdevcon.com
April 30,2018
Page 7
EXHIBIT “B”
TOWER DEVELOPMENT RESUME
93 Banyan Dr.,Hilo,Hawaii 96720 ,vww.towerdeycon.com 7
TOWERDEVELOPMENT,INC.TQYY~F~
2018TOWERRESUMETRACKRECORD-CERTAINTYOFHAWAIICLOSUREII:iw:iiiWisedFK)HI.Develpmeii(]ciiii—1I.R\i5~~keysIiciii~IQcclcvelrpedinII:i\\;iilSince2rH3II:iw:iiiIlitIP1jccis~I]~:in\11\()iIlcr(IflJ~Ll)uiiii~I:isi12Netuc35I~iN1+II:iw:iiiL)tvelpinelilsI:i\\aH~LIrp;isseJII~iniisIiip~\\itlhun‘a‘
2018CURRENTHAWAIIiHOSPITALITYPROJECTS2018CurrintDe~e1opmentProjectskauai-kauaiI;i~~)Ons6~)4Lnir\1;isrerPlanPhaseIlimbersResort(S21U\[ProjectUnderConsrrrcrin—Planned(~mpietionDareQ22()1K)—Lnder(~)fl5tfUCti()nBigisland-3KKRmI-Iilrn1D)ublelree,Bigisland(Q)nlplered\)vember21)1~Ililo.BigIslandIIa~vaii-l3anvanDriveRedevelopmentMasterPlan—(Pr)p()sedRedeveh)pmenrofIo~veis(olf(~)UfSetobe(~)nvertto~lixedUsePr()jeCIandiwoIl()5j)it;llitVPr()jeets)\.Io~HIlonolulu2011)—366Room\IariHorr“Vdirioii”V()peningof\e\v\\or1d~videBrand(S25()\I)Il()n()lulu21)1)5-6—405Ro)fl1Rebrand-1st13)utlpleII()telinIIa\vaji“\\vland\\~IikiiKi”(Operatedby\larriortC)urrvard)
CURRENTPROJECT:~KAUAILAGOONSHOTEL/RESORTRESIDENTIAL1DI\vassoughtby\[arric)tttoredeveh~1~’aN450acresofkauaiIaigoonsandPhaseI\Vi]IbeC()mpleredin201—withpn)posed.1imbersResorts2ScnrlMEetD1flCTtI~3631665r~t~ac~m.c&tcn•-VII()rel/ResidenceClub~nC:Hff•JPecOnt~I.1L,Vbat~4ç.Phase1ProjectCcsrS25(Pda-~)1—,I_I•.1T-iuascote——‘TOWIJDflTIOP%tT3IDiCS2()OM~F4ft~betDtHCT~2U~)E\t%a~.cfl=Phase3-400IIospirahrv/ResidentialUnitsJ‘a~~0)OOB,&9S~i.St530II~dtkIll$63?)
..~,~;CURRENTPROJECT:BIGISLANDOFHAWAII-388ROOMHILTONDOUBLETREEi-fP~~ti,....pfl~—~;g~_.4~—:::_)—4~
\VA1K1KI—\VYLAND\\~\1K11Ki—\[ARRICYI”l\\‘\TKTKlhr“HDIIIO\”\\‘((:uI{RK\lJt~l\RRIOT(:ouRIN~\RDI3IQ\\DI~Tht,a.C~~1~\VNl\\D\\~\IkIIKI2006ADDITIONALEXPERIENCE.HAWAIIHOTELPROJECTS
TOWERTEAMEXCLUSIVELYHAWAIIBASEDCOMPANIES(20YEARS-1998-2018)h)\\erI)evelopmuntInc.,~II3\\~H1corpuratlunI(R\c1hotels1,1C~aIlimitedliabilityC()1Y1~i1fl\wet~nSt1LIcti(nIl:l\Vail,corporationK\U\INII\I1)LSVDr\vInp~lI:\1—2uI42U22
TOWERHOTELSLLCEXECUTIVEMANAGEMENTTEAMDIRECTORS&OFFICERSCT~()ED13US1bRuI!•PPRESIDI\’i-SIU~\1~1NI1]JIZR‘I’VPC()\SIRUC1JO\-A\RO\NI(H1*\Rr‘R.PRISII)~\l
COMPANYAFFILIATIONS:HAWAIIPROJECTS:I~(kauai\iI\edSc\lasrerPlan1‘werDevelpnienr.Inc.(stand\anihaI—Itel.I)‘ul~lelteeh~HiltinChairman&PresidentI\verI—I,,tekl~l~\h‘haIwetRedeveh‘pmenrManagingPartner.lifestyleRetailPrpertiesiirI1)1I10\HotelDevelopmentFI‘ii’)IUIU.i—i;nvan\\vland\\iiikikiII,telDevch‘pnientNIatiL~1ru~Partner,\\i—IRI.!AFlil~,,FlawauI—hI\anil‘a11tel’\irpirrCenter()fficcRedeveh‘pment\I:iriu~iui~Partner,FIuIapaIo~‘zaIIC.I—litv,IUILT,Fla\vaiii)okCannet\IndustrialRedevelopmentBard,fDirect‘r,\\vland1(’Ufldatiti,\Iiso\It_lo.kaneolie2111j,tNubdivisiin(alif‘rniaEDUCATION:President.-\4(I’undatu‘nIS~MarshallSb~1‘,tBusiness,B\I‘fl~6HAWAIIEXPERIENCE:[SI)Nehilflaw,II)lOX’)I90X—PresentS51)1NI+inlbspitalin~thee,industrial,residentialandretailFAMILY:devel‘pmenttransactiinshildren:l3rittanvHush,r23,(haseBush’it21
COMPANYAFFILIATIONS:President)\\cl1)evel(pment.IncKauaiMixedLseMasterPlan13()ardOfDieecrind\iiniloiIIntel,IDoul)lelreeInIo\verIlords1.1ProjectDirector,Iifesrv]eRetailPrpertiesI.!II)11(1UiU,IIa\vallPresident,NIRIIanaii,I.!CIi)’1Nlan:iuinrPartner.Ni~runu121.1CHAWAIIEXPERIENCE:\I(ILll()\verRedevelopmentVI)llIO\II°ielDevelopment\\vland\\~iikilciIIntelDe\eIopllleu\irporrCenter()fficeRedevelopmentDoleC:Il~i1ervIndustrialRedevelopmentk;tneohe21)IntSuhdivisionIPPX—PresentS50{)\I+i~Ilospiralit\.office,industrial,residentialandretaildevehpmenttransacti(ns.EDUCATION:\\hsieriiNIicIii~:tn~fli\er5il\IIawortliColIe~eofHAWAIIPROIECTS:BusinessRealI~staieIinance,B\I
COMPANYAFFILIATIONS:HAWAIIPROJECTS:1)!(onsiruc!inil.!U\\QII)L\UlOpilWilI,Inc.Lanai.\lixcdUsc~[:isrcrPlanI~(Iait!Of1)iRd(II,,lO\\diIloRisI]!:(;i-aiidNanilnalord,lDouh]cliccPrcsicicnt&CI~(),~Ioiinai-ConstructionIN,Inc.\I~h;iIO\\drI<cdc\clopinciu]~rcsidcni&CH(),PaciticaInnovatixc(Mnri’:idrin~Si’vs,Inc.IDH.\NiolinarConstructionHI)lll()NIbidDcvc]opincntlThrcctor~If(m51irdrion.lnviciusLiid(:iiui’cli(oiisuiiiiig(ilotiP\\vlind\\‘aikikiInrc]I)cvclopincniI3oaijNlcin]ci,\4JIoundajion\rhictcsforIcsusCIiri~t\irportCctiicr()fficcl<cdcvclopincnrHAWAIIEXPERIENCE:DoIcCanncrvIndustrialI{cdcvc]optncntI—PrcscnrS500NI+inhospii:iI1i\~olticc.industrial,rcsalcniialid!ii]dd\d]()])IfldOltransactions.RESUMEAARONJ.MOLINAR
HawaiiGovernmentRelationships:NI~j\1)i.IIOflU]fl1U20h)2-201(JPicslJcflI.IIa~~aiiUUIiSifl&I.J~in~-CurantNLiiiIImncminiiK(H4~-1325iliiiiiuiinn(/ILi\\~i11l()J~ifl°1)1’’Th~-C‘-~I3~~ISIHIiJNIi\(IBilkI’~iun.20ü8-21)16Pursnnal((11I~iCintuliflailoni\aiIIl)IU~I1)nn1CL~LiUSt.IslandNIiI1tr\Kim201P1~5UnTIkmsnnal(A)nfICIiiilniiii:irinnavailableupnnre~1uest.KauaiNII\(1-Kiiiim-dP.(:tm-v~illini.H)~PlUsentGOVERNMENTREFERENCESPcisDnal(nnj:tctint~niwitmnntvail:ibleLI1)nniUL~UUST.
TOWERDEVELOPMENT,INC.(TDI)TOWERHOTELS,LLCTOWERCONSTRUCTIONHAWAII,INC.‘~
April30,2018
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EXHIBIT “C”
TOWER DEVELOPMENT,INC.REFERENCES
References:
Mayor Harry Kim,County of Hawaii
Billy Kenoi,Retired County of Hawaii Mayor
Mufi Hannemann,CEO of the Hawaii Lodging and Tourism Association
Brian DeLima,Agency Chair,Banyan Drive Redevelopment Agency
Duane Kanuha,retired Planning Director,Hawaii County
Lincoln Ashida,former Corporation Counsel,County of Hawaii
Senator Kaiali’i Kahele,State Senator representing 1~Senatorial District
Governor George Ariyoshi,Governor of Hawaii 1974-1986
Governor Neil Abercrombie,Governor of Hawaii 2010-2014
Elwin Ahu,Senior Pastor,Metro Christian Church,Honolulu
Hakim Ouansafi,Executive Director,State of Hawaii Housing Authority
Rabbi Itchel,Chabad of Hawaii Synagogue
James Hirayama,Hirayama Bros.Electric,Inc.
Corporate References:
Hilton Worldwide
Marriott International
Bank of Hawaii
Case Lombardi Pettit
Torkildson Katz Hetherington Harris &Knorek
Colliers International
Hall Structured Finance
Goldman Sachs
Hawaii Pacific University
Evolution Hospitality
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