Hawaii County’s Office of Housing and Community Development has purchased the Dolphin Bay Hotel in Hilo, with plans to convert guest rooms into 18 affordable rentals, officials announced Friday.
Located in the Puueo area of Hilo, the hotel at 333 Iliahi St. was started by the Alexander family in 1968.
In buying the longtime establishment, the county tapped $2.68 million in federal funding from its Emergency Rental Assistance 2 Program, the news release said.
According to the county, studio and one- and two-bedroom apartments will be available for residents earning up to 50% of the state’s annual area median income. In 2025, 50% of the AMI amounts to $53,200 for a single person and $76,000 for a four-person family, according to state data.
The hotel’s first units are anticipated to be ready in early 2026, pending renovation schedules and permitting timelines.
“Through this sale, the Dolphin Bay Hotel will continue its legacy of serving the Hilo community,” Hawaii County Mayor Kimo Alameda said in the news release. “I want to thank the Alexander ohana for partnering with the County to ensure these units stay affordable in perpetuity.”
John Alexander, the hotel’s former owner, said he was pleased with the sale.
“For decades, Dolphin Bay has been a gathering place and a home for many,” he said in the release. “I’m happy it will continue that role as affordable housing for local families.”
Kehaulani Costa, county housing administrator, said the purchase is part of the office’s strategy to expedite the expansion of affordable housing opportunities.
“Building new housing takes time, but families need help now,” Costa said in the release. “By purchasing existing housing, we can deliver affordable units faster and provide immediate relief for residents struggling with high housing costs.”
Kona Moran of Hilo Brokers Ltd., which facilitated the sale, said, “Helping with this sale was about more than a transaction — it was about preserving a sense of community.”
Mark Development Inc. has been selected to manage the property. The Honolulu-based company will provide further updates on applying for units in the coming weeks.
For more information, visit mdihawaii.com or housing.hawaiicounty.gov or contact meghanb@mdihawaii.com.
Source: The Garden Island
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