Denver-Based Aircoa Plans to Buy Share of Kona Kai

A Denver-based hotel chain plans to buy a 50% interest in the Kona Kai Club for $9.4 million, the co-owner of the 12-acre landmark Shelter Island resort confirmed Tuesday.

Aircoa, a large hotel chain that operates more than 50 properties, has opened escrow to buy out Kona Kai partner Dale Rorabaugh’s 50% interest, according to Bill DeLeeuw, who will retain his 50% interest in the facility.

DeLeeuw and Rorabaugh bought the Kona Kai last May for $15 million from brothers William and Bernard Lipin, so the sale to Aircoa would seem to indicate that their investment has increased more than 25% in nine months.

Escrow is scheduled to close on May 1, but the purchase hinges on approval by the San Diego Port District, said DeLeeuw.

Aircoa agreed to adopt DeLeeuw’s proposed $17.5-million, five-year remodeling plan, he added.

Aircoa will operate the 32-year-old club, an adjacent 92-room Kona Kai hotel and the 76-room Kona Inn, just a few yards to the east of the club.

DeLeeuw, a veteran real estate developer, will handle the development of the resort as well as coordinate the remodeling with Port District officials, who must approve the plans.

The Kona Kai Club hotel will be operated as a Clarion Hotel, Aircoa’s upscale hotel chain. The Kona Inn will become part of Aircoa’s Wynfield chain, a moderate-priced hotel using the all-suite concept.