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Waikiki, Hawaii Hotel, Newly Dubbed "Modern Honolulu", Calms Image Amid Bankruptcy

Owners, M Waikiki LLC, Create New Harmonious Atmosphere which Belies the Behind-the-Scenes
Turmoil and Bankruptcy Proceedings that Owners Seem on Track to Emerge from in August 2012

By Allison Schaefers, The Honolulu Star-AdvertiserMcClatchy-Tribune Regional News

May 07, 2012--How many light bulbs does it takes to help turn a bankrupt Waikiki hotel into what has been billed as the ultracool Modern Honolulu?

"We have 44,000 light bulbs in the ceiling of our new Addiction Nightclub," Vittal Calamur, the latest general manager at the Modern Honolulu, fires back.

Actually all those light bulbs were there when Marriott and New York hotel designer Ian Schrager of Studio 54 fame introduced the property in October 2010 as the Waikiki Edition and the club as Crazybox.

But Calamur, or "V" as his employees call him, is pumping $50,000 into the Addiction to make the club shine even brighter.

Hotel owner M Waikiki LLC, which is controlled by San Diego-based eRealty Fund, and Modern Management Service LLC, an affiliate of Aqua Hotels & Resorts, have been carving out a new brand since August. Efforts began after the firing of former hotel manager Marriott amid a hostile takeover and subsequent bankruptcy filing. After the initial shuffle, the property was renamed the Modern Honolulu.

"We are establishing a brand that is focused on lifestyle, chic and, not to be trite, modern," Calamur said.

Calamur is the Modern's latest weapon in the battle to position itself among Oahu's top luxury properties, like the Halekulani Hotel, the Trump International Hotel & Tower Waikiki Beachwalk, the Kahala Hotel & Resort, the Royal Hawaiian and the Westin Moana Surfrider. Both Calamur's nickname, "V," and his background reflect the laid-back luxury that the hotel owners and its new managers want to convey.

Calamur, who oversees daily activities at the hotel, has been involved in its development since 2007. He was an asset manager prior to the 2010 opening of the Waikiki Edition and was instrumental in its transition to the Modern brand in 2011. In mid-April, Calamur replaced Tom Juliano, who was promoted to senior vice president of operations at Aqua Hotels & Resorts after less than four months as the Modern's general manger.

Calamur's hotel background includes participating in the growth of the W Hotel brand, which launched the boutique hotel concept in the U.S., to 18 from two hotels. He was involved in opening The Keating, the first hotel by Pininfarina, designers of Ferrari and Maserati, and of Tower23, a hotel on the Pacific Beach boardwalk in San Diego. He also took on executive roles at the James Hotel in Scottsdale, Ariz.; and the Montage Resort & Spa, a five-star hotel on the bluffs at Laguna Beach, Calif.

While branding the Modern has been a challenge, Calamur called early efforts successful and said that the property has become synonymous with the lifestyle, cuisine and excitement that attract celebrity jet-setters as well as kamaaina. The hotel is home to Morimoto, an upscale Japanese restaurant.

"There are of lot of great hotels in Hawaii, and people have come to know them, but the Modern brings something that wasn't here before," he said. "You can get this kind of a hotel experience in London and in Paris and New York, but in Hawaii, until now, you couldn't get this."

Calamur defines the Modern's intangible "this" as the part of the experience that transcends the five senses.

"We really touch upon the seven senses," Calamur said. "The five senses are in everything from our music to the slight scent of plumeria in our lobby to our food and to the fabrics and thread counts in our guest rooms. But, we also focus on the sixth and seventh senses, which are the mind and the heart. That's really what aloha is all about."

Jason and Laura Dell of Vancouver, British Columbia, who were enjoying their vacation at the Modern last week, said they were sold on its concept and are planning a return trip.

"The staff is so helpful and polite," said Laura Dell. "It's just a beautiful property. The rooms are amazing -- very modern. The hotel is living up to its name."

Karen Doyle, a tourist from the United Kingdom, said she chose to stay at the Modern for its intimate boutique feel, its clean, crisp appearance and its location at the quiet end of Waikiki.

"I think what makes the Modern a different hospitality experience is that they have managed to achieve a hotel which has a calm, Zen-like appearance, whilst providing a warm, friendly and professional experience," Doyle said.

The hotel's popularity and harmonious atmosphere belie the behind-the-scenes turmoil and bankruptcy proceedings that owners hope to emerge from in August.

"Based on many positive trends, the owners clearly believe they took the appropriate action to protect this asset," said William A. Brewer, partner at Bickel & Brewer, lawyers for the hotel's owners. "The potential of this property is now beginning to be realized."

The financial performance of the hotel has improved nearly 70 percent since the new managers took over compared with its pre-bankruptcy operations under Marriott, according to court records. Occupancy at the hotel is up almost 30 percent compared with this time last year.

"After the first quarter of this year, we were nearly $1.5 million better in GOP (gross operating profit) and NOI (net operating income) than the same time last year, all accomplished while launching the Modern brand to the public," Calamur said.

If a June 1 bankruptcy confirmation hearing takes place, the proceedings could be complete by the end of July. The plan, which provides payment to all local creditors, relies on capital from the sale of the hotel to the Davidson Family Trust from Incline Village, Nev. The plan also allows for an $800,000-a-year repayment to Marriott if the court allows the former manager's claim.

Hotel owners are committed to Hawaii, Calamur said.

"They are definitely here for the long run. They haven't closed during the bankruptcy, and they've spent millions of extra dollars ensuring that the hotel succeeds," he said.

However, tensions that began with the Edition have not abated since the property became the Modern, said Ann Robinson, who lives in the adjacent Ilikai.

Bankruptcy proceedings have only delayed the progress of a January 2011 lawsuit filed by M Waikiki LLC in First Circuit Court against the Ilikai's association of apartment owners, seeking to block them from crossing over the hotel to access a pedestrian bridge over Hobron Lane.

"They aren't good neighbors," Robinson said. "Lawyers for both Edition and Modern are using the New York and Hawaii court systems to avoid dealing with illegal issues and complaints."

Nearby residents, who complained about noise at the Edition to the city Liquor Commission, have filed similar complaints about the Modern's temporary license, she said.

"We cannot speak to the previous operator's issues with the homeowners. However, we are very sensitive to their concerns and are making every effort to build positive relationships with our neighbors," Calamur said.

A temporary license has been transferred to Modern's ownership, and the hotel is working toward obtaining a permanent license, he said.

However, Unite Here Local 5 also has asked the Liquor Commission to place restrictions on the Modern, said Cade Watanabe, a spokesman for the hotel workers union, which is bargaining its first contract at the property.

Employee terminations and management changes have created instability at the property, Watanabe said. Work conditions have changed for the worse, and workers have lost pay and other Marriott benefits since the changeover, he said.

"We've filed numerous National Labor Relations Board charges alleging illegal actions by the Modern," Watanabe said.

Modern retained almost 80 percent of the hotel's original employees and has hired additional hotel workers since the transition, Calamur said.

"We are working in good faith with Local 5 to come up with a fair contract for our team members and the hotel," he said.

Los Angeles visitor Jennifer Hill, who filed a glowing review on TripAdvisor, said none of the resort's alleged problems were apparent during her recent hotel stay.

"I was tired and stressed when I arrived, but the woman who checked me in was so accommodating," Hill said. "They sent tea to my room and got me the last seating at Morimoto's."

The hotel's atmosphere and service as well as Addiction and Morimoto's placed it on Hill's list of 10 favorite hotels, said the avid traveler, who took 19 trips last year.

"I've found that a lot of bigger hotel chains don't care who is working at the hotel, but there is more attention to detail at boutique hotels like the Modern. I will come back," Hill said.


(c)2012 The Honolulu Star-Advertiser

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