“It‘s a sad day, I think. It's a sad day for Hilo, it's a sad day for the state," said bankruptcy trustee David Farmer.
Farmer took over operations of the Naniloa Resort four months ago. He had hoped to get a lease extension from the state until the end of the year, in order to get one of two interested buyers to take over the distressed property.
The board decision came after Mayor Billy Kenoi pleaded--enough already.
He came armed to the board meeting with pictures of a dilapidated hotel tower with one working elevator.
Kenoi talked about a swimming pool with green algae water that has been like that for not just weeks and months-- but years.
"How can you say anything but shameful, disgraceful, and deplorable. And if you go from the ocean, standup paddling--It’s worse."
Kenoi pointed to an outside kitchen built when the restaurant was shutdown.
"How? How did this happen? This is one kitchen at one Volcano Resort? Who would take their family eat there? $300 a night? State conventions? Who is coming back?” said Kenoi.
The mayor said East Hawaii deserves better.
"Rather than talk about what should have happened, and would have happened, we are in the process of what can happen in the next month or two to achieve what you want to achieve," said board chairman William Aila.
After consulting with attorneys in executive session, the board voted unanimously not to extend the deadline for land lease and payment.
The hotel had also failed to pay a $250,000 lease payment last month.
"I think this is the best course for us to move things and force things and along in the most expeditious manner to resolve the situation out there," said board member Rob Pacheco.
”Without a lease and essentially not enough money to keep things going, I have no choice but to let everybody go because we are not going to have people work for free," said Farmer.
Farmer, who cautioned the state about the chaos that would ensue, is now knee-deep in it imself. He said without a lease the landmark hotel will close at midnight Monday. While no official announcement has been made, Farmer said he would be working through the weekend to see if there would be any way to avoid the shutdown.
The Naniloa hotel had been under control of Ken Fujiyama who outbid Outrigger and Starwood hotels for the lease.
But Fujiyama was unable to keep up the $500,000 lease payments and has not been able to renovate the hotel as promised.
The hotel fell into disrepair and Fujiyama filed for chapter 11 bankruptcy protection about a year ago.