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Hilo's Banyan Drive Redevelopment Could Reshape East Hawaii Real Estate and Tourism Landscape

·7 min read·👀 Watch

Executive Summary

Legislation to redevelop Hilo's Banyan Drive is advancing, signaling potential new development and tourism opportunities in East Hawaii over the next 3-5 years. Businesses with interests in the area should monitor specific infrastructure and zoning shifts to identify early engagement opportunities.

  • Real Estate Owners/Developers: Potential for new projects, but must track zoning and permitting changes.
  • Investors: Emerging opportunities in hospitality and commercial real estate in Hilo.
  • Tourism Operators: Possibility of increased visitor capacity and altered local tourism dynamics.
  • Entrepreneurs: Potential for new service-based businesses catering to revitalized tourism.
  • Action: Monitor legislative progress and county planning department announcements over the next 6-12 months.

Watch & Prepare

Medium Priority

Ignoring this could mean missing early engagement opportunities or being unprepared for significant infrastructure and business landscape changes in East Hawaii.

Monitor legislative proceedings and Hawaii County planning department announcements regarding Banyan Drive. Key indicators to watch include specific infrastructure funding allocations, finalized zoning proposals for the area, and timelines for the bidding or development phases. If concrete development plans are announced (e.g., permit applications filed, construction bids solicited), prepare to engage with local authorities, assess investment opportunities, or adjust business strategies accordingly.

Who's Affected
Real Estate OwnersInvestorsTourism OperatorsEntrepreneurs & Startups
Ripple Effects
  • →Infrastructure investment → Increased local business demand for construction, materials, and services in Hilo.
  • →Revitalized tourism → Higher demand for local goods and services → Potential upward pressure on input costs and operational expenses for businesses.
  • →New commercial development → Increased demand for labor → Potential shifts in local wage rates and workforce availability.
Vertical shot of Rainbow Falls waterfall surrounded by lush greenery in Hilo, Hawaii, USA.
Photo by Dane Amacher

The Change

Legislation is progressing through both the Hawaii State House and Senate aimed at facilitating the redevelopment of Hilo's Banyan Drive. This initiative seeks to revitalize a historically significant, but currently underdeveloped, area into a potential hub for tourism and local commerce. While specific timelines for redevelopment remain fluid, the legislative advancement indicates a commitment to addressing the area's dilapidated state and unlocking its economic potential over the coming years. Opposition and debate continue regarding the pace and specific approaches to redevelopment, which may influence final implementation and timelines.

Who's Affected

  • Real Estate Owners and Developers: Property owners adjacent to or within the proposed redevelopment zone in Hilo stand to benefit from potential land value appreciation and new development opportunities. Developers will need to closely monitor evolving zoning regulations, permitting processes, and infrastructure plans introduced by the state and county to assess project feasibility and compliance. The legislation could streamline some aspects of development compared to the current stalled state of the area, but local land use regulations will still apply.
  • Investors: Investors with an interest in Hawaii's real estate and tourism sectors should consider East Hawaii, specifically Hilo, as a region with potential growth. The Banyan Drive redevelopment could attract new hospitality ventures, commercial spaces, and associated services, creating new investment landscapes. Venture capital and angel investors may find opportunities in startups catering to a revitalized tourism market, while portfolio managers should evaluate the long-term impact on regional property values and tourism revenue.
  • Tourism Operators: Existing and prospective tourism operators in East Hawaii may see significant shifts. A revitalized Banyan Drive could increase overall visitor capacity, potentially drawing more tourists to Hilo and the surrounding Hilo side of the island. This could translate to increased demand for accommodations, tours, and related services. However, operators should also anticipate potential changes in the local tourism landscape, including new competitor businesses and evolving visitor experiences.
  • Entrepreneurs and Startups: The revitalization project presents opportunities for entrepreneurs and startups. New businesses focusing on hospitality services, local crafts, food and beverage, and experiential tourism could find a receptive market. Infrastructure improvements and increased visitor traffic could create demand for services that cater to both tourists and the local community, offering a chance to scale within a potentially growing economic region.

Second-Order Effects

  • Infrastructure Investment → Local Business Demand: Increased state and county investment in Banyan Drive infrastructure will likely lead to a short-term surge in demand for local construction firms, material suppliers, and related services. This could provide a temporary economic boost to businesses in the Hilo area.
  • Revitalized Tourism → Increased Local Spending → Input Cost Pressures: A successful Banyan Drive redevelopment and subsequent rise in tourism could lead to increased demand for goods and services from local businesses, including agriculture and food producers. This higher demand, coupled with Hawaii's inherent logistical constraints, could put upward pressure on local supply chains and operating costs for businesses across the island, impacting margins.
  • Development → Housing Demand → Labor Market Shifts: Any significant new commercial and hospitality development in the Banyan Drive area could increase demand for local labor, potentially impacting wage rates and the availability of workers for existing small businesses in Hilo, particularly in the service sector.

What to Do

Real Estate Owners and Developers: Monitor legislative updates and Hawaii County's planning and zoning department for specific proposals related to Banyan Drive development. Engage with county officials early in the planning process to understand potential zoning changes and permitting requirements that will affect any future projects in or near the area. Opportunities may arise for land acquisition or partnerships as plans solidify.

Investors: Track the progress of the Banyan Drive redevelopment bills and any related county initiatives. Research Hilo's current real estate market and identify potential niche opportunities in hospitality, commercial, or long-term rental properties that could benefit from increased tourism and economic activity. Pay attention to initial infrastructure investment announcements as indicators of future growth.

Tourism Operators: Stay informed about the projected scale and nature of the Banyan Drive redevelopment, particularly how it might influence visitor numbers and types visiting East Hawaii. Evaluate how your current offerings align with potential new tourism experiences and consider strategic adjustments to capitalize on increased visitor flow. Beginning conversations with local authorities about potential integration or complementary services could be beneficial.

Entrepreneurs and Startups: Research the anticipated demographic shifts and visitor profiles that a revitalized Banyan Drive might attract. Identify unmet needs in the Hilo market related to tourism services, local experiences, or amenities that could be addressed by new ventures. Begin preliminary market research and networking within the East Hawaii business community to prepare for potential opportunities.

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