(BIVN) – The Dolphin Bay Hotel has been purchased by the County of Hawaiʻi, with plans to convert guest rooms into affordable rentals. 

On Friday, the Hawaiʻi County Office of Housing and Community Development announced the purchase of the hotel, located in the Puʻuʻeo area of Hilo, for $1.28 million. Officials say the acquisition was made possible by utilizing federal funding from the Emergency Rental Assistance 2 Program. 

The County plans to create 18 affordable rentals with the property. Studio, one-bedroom, and two-bedroom apartments will be available for residents earning up to 50% of the Area Median Income, a news release stated. 

The County anticipates the first units will be ready to rent in early 2026, pending renovation schedules and permitting timelines. Mark Development Inc. has been selected to manage the property, the County says. 

Photo of The Dolphin Bay Hotel courtesy the County of Hawaiʻi

“Through this sale, the Dolphin Bay Hotel will continue its legacy of serving the Hilo community,” said Mayor Kimo Alameda. 

The hotel was established by the Alexander family in 1968. 

“For decades, Dolphin Bay has been a gathering place and a home for many,” said John Alexander, the hotel’s former owner. “I’m happy it will continue that role as affordable housing for local families.” 

“I want to thank the Alexander ʻohana for partnering with the County to ensure these units stay affordable in perpetuity,” Mayor Alameda added. 

“Building new housing takes time, but families need help now,” said County Housing Administrator Kehaulani Costa. “By purchasing existing housing, we can deliver affordable units faster and provide immediate relief for residents struggling with high housing costs.”