San Diego Business Journal

Port Approves Bank Financing for Kona Kai Resort Renovation

By Lou Hirsh Monday, March 10, 2014

The Unified Port of San Diego has approved a financing plan for a renovation of Kona Kai Resort at Shelter Island, under which hotel operators will obtain a maximum $16.5 million loan from Torrey Pines Bank.

Renovation financing plans of port district tenants are subject to review by port commissioners.

Westgroup Kona Kai LLC, a unit of Noble House Hotels & Resorts, has received prior approval for a two-phase renovation intended to reposition Kona Kai as a high-end boutique property, with construction projected to total about $14.3 million.

Operators of the 129-room property plan significant renovations to guest rooms, meeting spaces and the hotel’s spa, restaurant and patio dining area, among other elements. First-phase enhancements will also be made to next-door marina and dock buildings, landscaping and beach areas, with plans to add a water-oriented feature.

The second phase includes plans to add 41 guestrooms in two new buildings, a new two-story marina retail building and a second pool, as well as to expand the existing pool deck.

The property is at 1551 Shelter Island Drive. Construction is expected to start this spring.

Noble House Hotels & Resorts bought the property in January 2013, saying at the time that it planned to do an extensive renovation.