By PAUL C. CURTIS
TGI Business Editor
Monday, May 15, 2000
LIHU'E - Gilligan's night club at the former Outrigger Hotel will close Saturday as new owners begin an $8 million
renovation project aimed at upgrading the Nukoli'i hotel into a four-star property.
Peter J. Walz, partner in Driftwood Ventures, Inc. (DVI), owner of the new Radisson Kaua'i Beach Resort, said the
night club didn't fit the partners' vision for the property.
Gilligan's catered mostly to people who were not hotel guests, the place was noisy, with guest rooms right above
it, and interactions between guests and residents weren't always amicable, Walz said.
The nightclub area will be converted to office space and possibly a small restaurant. A concrete wall between the
night club and lagoon will be removed to make way for lanai seating.
Plans for refurbishing the property were laid out Thursday at a Kaua'i Planning Commission public hearing on permits
necessary for the work.
The commission, hearing no negative testimony nor receiving any written testimony against the project, unanimously
approved county Planning Department staff recommendations to approve the permits.
New water features, a sand-bottom swimming pool near the ocean, total refurbishing of all 350 guest rooms, a remodeled
porte cochere, new landscaping for the grassy area fronting the porte cochere, and other improvements are planned.
The hotel was recently purchased from KH Hotels Partnership for around $25 million, and Walz said the $8 million
in upgrades to the property will allow the Radisson to compete with hotels on all islands and increase the number
of guests.
He said he hopes renovation of the hotel will start a trend of upgrades at hotels further up the Coconut Coast.
Walz said DVI and Radisson are both interested in increasing their presence on the island. Under an arrangement
rare for Kaua'i hotels, DVI will own and manage the property, and Radisson will market the hotel in its worldwide
system as a franchisee.
Walz said Radisson was chosen for its potential to reach new markets.
DVI considered purchasing the resort-zoned, 34-acre parcel immediately south (Lihu'e side) of the hotel, but development
on that property is only feasible for a timeshare venture, Walz said, and DVI is not a timeshare company.
Peter Herndon, once a manager of the hotel and still affiliated with the owner of the 34 acres, Haseko (Hawai'i),
Inc., said there have been other inquiries about the parcel from potential buyers, but nothing firm to report at
this time.
Herndon, who testified in favor of the permits before the commission, wore three hats: executive vice president
of Haseko (Hawai'i), Inc; president, Kaua'i Beach Resort Association, which is responsible for the common elements
of the resort (roads, lagoons, sewage treatment plant, etc.); and president, Association of Apartment Owners Kaua'i
Beach Villas.
The Aston Kaua'i Beach Villas is a condominium complex adjacent to the hotel that is quickly becoming a timeshare
resort managed by Pahio Resorts, Inc. Pahio is buying units in the project and converting them to timeshare.
Lynn McCrory, president of Pahio, looks forward to "incredible synergy's" between the hotel and condominiums,
she said in her supportive testimony before the commission.
She said the construction jobs and additional hotel jobs will be beneficial to the island's economy.
Renovation will begin as soon as demolition permits are acquired and is expected to be finished by October, Walz
said.
Thomas Rosati, current general manager of the hotel, will remain in that position after the hotel renovations are
completed, Walz said.
Rosati has over 20 years experience in the hospitality industry, and both Walz and Rosati had glowing praise for
the current hotel's 260 employees.
"The hotel is nice to start with, and the staff is absolutely wonderful," said Rosati.
Of the hotel's current employees, 80 percent have been with the property the entire 14 years it's been open, and
all are "well qualified and extremely friendly," Walz said.
McCrory pointed out that the Radisson is the first and only hotel since Hurricane 'Iniki to come back as a hotel
as opposed to a timeshare resort.
Herndon said the refurbishing plan is right for the property and for the island, and the investment ($5 million
for guest room interior renovations, $3 million for the other improvements described earlier) will pay off in the
long run.
Upon questioning from commission Chair Gary Baldwin, Walz said local contractors will be used as much as possible
for the renovation work, and that additional hotel jobs will probably be created as a result of the refurbishing.
Lindsay Burton, who lives in Kaua'i Beach Villas, presented testimony and a petition of fellow villas owners who
support the renovation project.
Letters and oral testimony in support of the plan came from Kris Nakata, executive director, Kaua'i Economic Development
Board; Sue Kanoho, executive director, Kaua'i Visitors Bureau; Sandi Kato-Klutke, general manager of the Aston
Kaua'i Beach Villas and board member of the Hawai'i Hotel Association Kaua'i Chapter; and Pam Parker, Kaua'i Ready
to Learn coordinator.
Kaua'i Chamber of Commerce President Mamo Cummings said raising the property to a four-star resort means a higher
staff-to-guest ratio, and guests who may spend more than others in the community. All of that means more opportunities
for the island's residents, she said.
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