Developer Ed Bushor and his longtime friend, marine artist Wyland, are buying the bankrupt Naniloa Volcanoes Hotel for $5.2 million, a U.S. Bankruptcy Court judge confirmed Tuesday.

The $5.2 million offer beat out an earlier unconfirmed bid for $3.7 million by Ramco Properties, owner of the Hilo Hawaiian, which is next door to the Naniloa. It also shut out other last-minute offers from two other developers, including Peter Savio, who owns Pagoda Hotels.

"Ramco made their offer a week ago Monday, but the judge didn’t confirm them, giving other investors an opportunity to overbid," said Mark Bratton, vice president for Colliers International, who is serving as the property’s broker. "The door was almost shut, but we had a flurry of activity over the weekend with about six investors showing interest. In the end, three showed up, and they each bid three or four times."

The Naniloa went into foreclosure last year after Hawaii Outdoor Tours Inc. defaulted on a $10 million loan it used to buy the hotel, which sits on 71 acres of state leasehold land. Only 269 of the hotel’s 333 rooms are in active service.

"There’s a lot of risk, but the numbers and the location attracted a lot of people," Bratton said.

Bushor, co-founder of San Diego-headquartered eRealty Companies Inc. and its affiliates, is known in Hawaii for acquiring, repositioning and selling transformed properties. Most recently he was involved in the purchase of the Aloha Tower and has said that he was a passive investor in the Waikiki Edition, now known as the Modern Honolulu. Other instances where he turned traditional business models on their head include the Airport Center, Dole Cannery and the transformation of the Ohana Waikiki Surf into the former Wyland Waikiki. In an earlier interview Bushor said the transformation of the 1960s-circa Ohana Waikiki Surf on Kuhio tested his mettle.

"That corner of Kuhio had prostitution and drugs," Bushor said in an earlier interview. "Because of that the hotel was getting about $49 a night."

The project — which brought Bushor to Hawaii every week for a year and had everyone convinced it wouldn’t work — was a financial success, he says.

"The hotel’s average daily rate more than doubled, and I was able to sell it for a profit," Bushor says, adding that the property has since been branded a Marriott Courtyard.

Bratton said he expects the sale of the Naniloa to Bushor and his partners to close by year’s end.

"I believe the Wyland people are planning to close the hotel, reinvest and reopen," Bratton said.

Bratton said earlier estimates by hotel industry experts had anticipated that the Naniloa would need an investment of about $20 million to $30 million to address all of its deferred maintenance and take full advantage of its beachfront location.

"Idon’t know their plan or budget, but I expect that they will make a significant investment," he said.

Joe Toy, president and CEO of Hospitality Advisors LLC, said Bushor’s decision to hire Aqua Hospitality to manage his newest Wyland resort should help give it reach in the market.

"While it may be positioned as a Wyland property, it will be operating under Aqua and will have access to all of resources that Aqua has included its sales and distribution system."