Erik Jacobsen had successfully completed construction of the Royal Lahaina Beach Hotel at Kaanapali Beach where he built 32 luxury one and two story cottages with six suites in each cottage and a world-class dining and bar facility.  He also built the second phase of the Sheraton Maui Hotel and the Kaanapali Beach Hotel.

As Jacobsen was completing construction of the Kaanapali Hotel he approached Svoboda about wanting to build an apartment project on beach frontage at Kaanapali, but Svoboda was forced to tell him it was not possible to do so since the master plan only permitted hotels on the beach.  In a subsequent conversation Svoboda shared with Jacobsen an idea that could be mutually a great opportunity.  He suggested building a condominium consisting of hotel suites and all the amenities of a luxury hotel with a national hotel chain operating the hotel.  This would meet the requirements of the master plan and still provide Jacobsen with what he indicated he wanted to do, namely build a condominium.

Ed Hasting was the resident manager of the Hilton Hawaiian Village at that time and a friend of Jacobsen, so Jacobsen and Svoboda sought his opinion as to whether or not Hilton would consider expanding to the neighbor islands and specifically Kaanapali.  Hastings agreed to arrange for the Hilton executives, the next time they were in Honolulu, to meet with Jacobsen and Svoboda.   Hilton’s West Coast lawyer and deal maker was Greg Dillon from Los Angeles who frequently traveled to Honolulu and he was the first Hilton home office executive to be exposed to the concept of a condominium hotel.

Dillon was very negative about the condominium hotel ownership concept.  As far as he knew it had never been done before and in his opinion condo ownership was never designed for such a purpose.  He feared Hilton might have too many condo owners to satisfy, and also Hilton’s capital budget for Hawaii for the next two years was committed to expanding the Hawaiian Village in Waikiki.  However, when he came to understand that Hilton wouldn’t be required to put up any capital as it would be a turn-key hotel available to them and they would operate on a profit-sharing formula, he became interested.  And, when he was further assured that Hilton would only have to deal with the condo-board and not the individual owners, he softened-up even more.  Of course, Dillon had many, many other issues which had to be addressed, but the final and one of the most difficult to get him to agree to was the use of Hilton’s name during the public sale of the condo units.  In the end, Dillon agreed to the total concept and documents were prepared and executed which launched the project.

After everything was settled with Hilton, and the Real Estate Division of the State of Hawaii had given their approval to sell leasehold condominiums the sales took off in the fall of 1965.

Robert Svoboda
Fritz Burns
Conrad Hilton
Erik Jacobsen
Robert Svoboda, General Manager of Amfac’s Property Division, Fritz Burns, Vice-Chairman of the Hilton Board, Conrad Hilton, President of the Hilton Board, and Erik Jacobsen, contractor and developer, on the occasion of the signing the project documents.