The end of the former Uncle Billy’s Hilo Bay Hotel marks the beginning of a new era for Banyan Drive, Hilo stakeholders hope.
From the outside the 148-room building appears to be entirely gone after months of demolition work that began in 2024. In truth, some underground infrastructure remains, but that likely will be gone soon.
Russell Tsuji, the state Department of Land and Natural Resources’ Land Division administrator, said in an email the DLNR has issued a notice to proceed for design work needed for “underground demolition and removal.”
State Rep. Sue Lee Loy of Hilo said the remainder of the demolition should be completed by the end of March, still matching a DLNR timeline established in 2024.
The derelict building was a black mark for Banyan Drive, becoming a magnet for squatters, crime and health hazards before the site was finally walled off. A 2023 County Council resolution urging state action to label the building a health and public safety hazard estimated the county has spent more than $122,000 responding to more than 1,000 fire calls alone at the site since May 2018.
The building’s demolition also represented the end of a long bureaucratic debate. Although the former hotel’s removal was long overdue, because it was built on land originally leased from the state, the DLNR had to pay for the demolition, which the department was unable to afford.
Gov. Josh Green in 2023 issued an emergency proclamation expediting the regulatory processes necessary to remove the building, and the state Legislature appropriated $8 million in reimbursable general obligation bonds to fund the project.
With the troublesome building no more, lawmakers and stakeholders hope for a new vision for Banyan Drive and the Waiakea Peninsula.
“What I would like to see is action,” said James McCully, member of the Banyan Drive Hawaii Redevelopment Agency. “Demolishing Uncle Billy’s was a necessity. Now that we’re done cleaning up the sins of the past, so to speak, the question is, How do we proceed proactively?”
McCully said legislation will be introduced during the current session of the Legislature to transfer land at the Waiakea Peninsula from DLNR to the Hawaii Community Development Authority, which is in the state Department of Business, Economic Development and Tourism.
The bill has not yet been introduced, but McCully said he understands it has strong support in both chambers of the Legislature.
The proposed bill, he said, would allow for better long-term planning for the region, “instead of Land Division being focused on solving today’s problems, which means rent collection.”
McCully said DLNR’s difficulty in paying for the Uncle Billy’s demolition suggests the department would prefer to extend leases of other distressed properties — such as the former Country Club Condominiums — rather than allow them to lapse back to the DLNR and leave the department on the hook for another demolition.
Instead, McCully said, HCDA could take a closer look at the area and make management decisions that best benefit the immediate area. However, he clarified that HCDA would not be the ultimate beneficiary of the property and would instead be a facilitator agency that could grant management of the site to another entity, with that decision made by a board of Hilo residents.
One of those decisions will be the future of the Uncle Billy’s lot. McCully said public feedback largely has favored keeping the parcel an open park space.
“There’s no future for new resort development, with modern setback requirements and sea level rise,” McCully said. “That’s something we’ve heard over and over from the public.”
Lee Loy said the property likely will remain walled off for some time until teams can ensure that hazardous materials — such as asbestos, which was present in the building — are thoroughly removed.
“We’ve got to reengage with our community to figure out what people want to see,” Lee Loy said, adding she has heard some suggestions that food trucks could be allowed to use the parcel.
