First Residents Moving into Kamehameha Schools’ Kakaako Development

By Adriana Pop, Associate Editor

Kamehameha Schools’ Six Eighty apartment project in Honolulu recently welcomed its first residents. The newly renovated building is located at 680 Ala Moana Blvd. in Kakaako and offers 54 loft-style units affordably priced for median-income workers. On the ground floor, the project also includes 8,600 square feet of commercial space.

Designed by Architects Hawaii, Six Eighty offers 42 studios and 12 one-bedroom units. The apartments are equipped with stainless steel appliances and feature designer touches like vinyl whitewashed floors, open-concept floor plans and 12-foot ceilings. Amenities include laundry facilities on each floor, two recreational rooms – a game room and a media room – and a recreational deck with barbecue and lounge areas. Rents range from $1,100 to $1,400 per month.

Six Eighty is the first major construction project of Kamehameha’s 15-year master-planned development in Kakaako. The developer plans to build a total of 2,750 residential units in a diverse community that will include a mixture of housing types, from street-level urban townhomes to work-live units and high-rise condominiums.

In regional news, a joint venture between an affiliate of Hyatt Hotels Corp. and an affiliate of Host Hotels & Resorts Inc. plans to develop and operate a 131-unit Hyatt Residence Club resort on Maui. The $40 million Hyatt Kaanapali Beach time-share project will also include a 6,500-square-foot open-air lobby with ocean views, a pool with a pool bar and a multi-level deck, a 3,000-square-foot fitness center, an owners’ lounge, a retail store and a 75-seat casual dining restaurant.

“Kaanapali Beach is one of Hawaii’s most beautiful areas, and we believe that Hyatt Kaanapali Beach, a Hyatt Residence Club, will be a highly sought-after addition to the Hyatt Residence Club system,” said John Burlingame, global head of residential development for Hyatt Hotels & Resorts.

Upon completion in 2014, Maui’s Hyatt Kaanapali Beach will be the first Hyatt Residence Club property in Hawaii. The company’s 15 other Hyatt Residence Clubs are located throughout the United States and Puerto Rico.

Photo credits: www.ksbe.edu

Ala Moana Center Redevelopment to Begin in Early 2013; New Residences Coming to Lahaina

By Adriana Pop, Associate Editor

The $543 million redevelopment of the Ala Moana Center in Honolulu is expected to start early next year, the Pacific Business News reports. The completion date has been set for late 2015, General Growth Properties Inc. said in a filing with the U.S. Securities and Exchange Commission.

The Chicago-based company plans to expand Hawaii’s largest shopping mall by replacing the current 340,000-square-foot Sears store with approximately 700,000 square feet of retail and restaurant space, including a three-level, 160,000-square-foot anchor tenant. Plans also call for a fourth-level parking deck.

In April, General Growth completed the acquisition of 11 Sears anchor pads from Sears Holdings Corp. for a total of $270 million. Under the agreement, the lease on the space at Ala Moana – one of the country’s most lucrative malls, with sales surpassing $1,300 per square foot – accounted for $250 million. Sears will continue to operate the store through the end of 2013, the newspaper reports.

In other news, Hawaii developer Stanford Carr is planning 203 residential units on a vacant 22-acre site along Front Street in Lahaina on Maui. The $60 million Kahoma Village housing project will be developed on land owned by The Harry & Jeanette Weinberg Foundation, the Maui News reports.

Kahoma Village will offer a mix of three- and four-bedroom single-family dwellings and two- and three-bedroom multifamily units. According to a recent draft environmental assessment, a total of 102 multifamily units will be affordable to households making between 80 and 160 percent of the island’s median income.

Developer Stanford Carr told the newspaper that he was confident the project would appeal to residents.

“Where else can you find — on Front Street — an opportunity to buy a brand-new home? As well as starter homes?” he asked.

Recent market studies show that Kahoma Village will experience a reduced level of competition since there is a limited supply of housing on the market in the West Maui region. The build-out period is expected to take two years.

Photo credits: www.malls-info.com

Luxury Condominium High-Rise Coming to Honolulu

by Adriana Pop, Associate Editor

HHMK Development, LLC, comprised of landowner and developer The Howard Hughes Corporation and a joint venture of Honolulu development firms, The MacNaughton Group and Kobayashi Group, are developing a luxury residential tower above the existing Nordstrom parking structure at Ala Moana Center in downtown Honolulu.

Called ONE Ala Moana, the 23-story high-rise will offer 206 one, two and three bedroom condominium homes ranging from 760 to 4,100 square feet. Prices will go from approximately $500,000 for the lower floor one-bedroom condominiums to over $9 million for penthouse suites. The average price per unit will be around $1.6 million.

“We are seeing extensive interest among potential purchasers and anticipate rapid sales because of the unique location, high quality design and finishes and the fact that buyers could be living in their new homes within the next 24 months,” said Bert Kobayashi, Sr., Kobayashi Group Founder and Senior Advisor. “The early interest is from individual buyers and the high-end realtor community, both in and outside Hawaii, who know our reputation and dedication to exceptional quality and stand-out developments,” Kobayashi added.

The project recently received $40 million in mezzanine debt with profit participation. A&B Properties, the real estate subsidiary of Alexander & Baldwin, Inc. is providing $20 million, while another $20 million is being provided by List Island Properties, LLC, a U.S. subsidiary of LIST Co., Ltd. of Japan. LIST will also serve as an exclusive representative of the new property for buyers in Japan.

HHMK Development has selected architectural firm Benjamin Woo Architects of Hawaii and Solomon Cordwell Buenz of San Francisco and Chicago to design the new building. Heyer & Associates LLC is the exclusive broker for the project, while Joyce Timpson & Associates is handling the marketing.

Photo credits: HHMK Development LLC

Developer Plans Large Mixed-Use Community in Downtown Kihei on Maui

By Adriana Pop, Associate Editor

The Krausz Cos. is planning a 320,000-square-foot sustainable, mixed-use project in the city of Kihei, one of Maui’s most populated communities.

According to the Pacific Business News, the proposed Downtown Kihei project calls for a village square; more than 200,000 square feet of office, medical office, retail and restaurant space; a 44,180-square-foot movie theater; a four-story, 150-room hotel; and more than 1,000 parking stalls.

The new development will be built between the Piilani Village Shopping Center and the Longs and Azeka’s centers, on four parcels of land totaling 27 acres. The San Francisco-based developer has purchased the property for approximately $10 million, the newspaper reports. The Krausz Cos. is now in the process of entitling the land. The company also owns the Safeway-anchored Piilani Village Shopping Center, which it acquired in 2003 for $27 million.

In other news, the Hawaii Community Development Authority has asked developers Lend Lease and Forest City Enterprises Inc. to post online elements of their proposals for the 690 Pohukaina project in Honolulu. According to the Honolulu Star-Advertiser, the developers will present their bids to the board on Nov. 20. A vote is expected in December.

The $500 million project will include the construction of two residential towers in Kakaako. One of the buildings will include 300 affordable for-sale units, while the second structure will offer 500 market-price units. Plans also call for a commercial and civic building, a parking structure, a business innovation incubation space and offices for the state’s library system and Friends of the Library.

Construction on the project could start in 2015 or 2016, with completion scheduled for the summer of 2019. The state agency estimates that 690 Pohukaina will create 500 construction jobs and as many as 1,000 indirect jobs.

Photo credits: The Krausz Cos.

TNP Strategic Retail Trust Sells Waianae Mall, Acquires Lahaina Gateway

By Adriana Pop, Associate Editor

TNP Strategic Retail Trust Inc. of Irvine, Calif., has entered into an agreement to sell the Waianae Mall Shopping Center in Leeward Oahu to an unnamed buyer. The company acquired the property in June 2010 for $25.7 million.

Built in 1981, the retail center comprises 11 buildings totaling 170,275 rentable square feet. It is anchored by Longs Drugs and City Mill Superhardware, and includes a mix of national and regional tenants, such as Burger King, Fantastic Sams, Goodyear Tire, the state of Hawaii, American Savings Bank, Waianae District Health and Aaron Rents.

“The property has performed well and has met our strategic goals. We have decided to sell the property to realize a significant return on investment, with the proceeds to be redeployed into new opportunities,” Thompson National Properties senior vice president of acquisitions Stephen Corea commented in a statement. “TNP continues to see attractive opportunities in the market in which to reinvest the proceeds from the sale.”

TNP Strategic Retail Trust also announced it is purchasing the leasehold interest in the Lahaina Gateway shopping center on Maui for an undisclosed amount. In September 2011, Central Pacific Bank acquired the 11-acre property out of foreclosure. The sale is expected to close this month.

Built in 2008, Lahaina Gateway has approximately 137,000 square feet of leasable area and a vacancy rate of about 20 percent. The shopping center is anchored by Foodland Farms Market, Barnes & Noble and Office Max.

“The acquisition of Lahaina Gateway by the company is consistent with our strategy of acquiring a mix of stabilized and value-added assets. The property serves a strong tourism-based demographic while also serving the needs of the community,” said Corea.

Marketwide, Hawaii’s retail sector ended the second quarter at a 5.9 percent vacancy rate, an increase from the first quarter’s 5.5 percent. According to a report released by CBRE Group, Maui and Kauai registered the highest vacancies, at 11.4 and 17.3 percent, respectively.

Photo credits: hawaii.gov

Chart courtesy of CBRE Group Inc.

Honolulu Officials Approve Leasehold Sale of City-Owned Affordable Housing

By Adriana Pop, Associate Editor

The Honolulu City Council has approved Mayor Peter Carlisle’s plan to sell the city’s 12 leasehold affordable rental complexes situated in various parts of Oahu to a private entity for $142 million.

Called Honolulu Affordable Housing Partners L.L.C., the corporation comprises Highland Property Development L.L.C. of Arcadia, Calif.; Richard Gushman of Honolulu, who has more than 40 years of real estate experience; and Stephen Gelber, a Honolulu real estate and tax attorney who has worked on many affordable housing transactions in Hawaii.

The leasehold purchase agreement requires the entity to make a one-time payment of $142 million to the city and spend an additional $42 million within the first two years of the 65-year lease term to renovate the apartments.

Throughout the term of the lease, the purchasers will also be required to abide by the current affordable housing rules. Under federal HUD guidelines, out of a total of 1,257 units, 850 must qualify as low-to-moderate income and 189 as gap income units, whereas the rest of the apartments will be rented at market rates.

In other news, Black Sand Capital L.L.C. has acquired the King’s Village Shopping Center in Waikiki. According to the Pacific Business News, the Honolulu-based real estate investment company purchased the property from Oregon-based Elda Investments L.L.C. for $41.3 million.

Developed in 1972, the 38,764-square-foot retail center at 131 Kaiulani Ave. is home to more than 45 shops and restaurants, including Tanaka of Tokyo, Rock Island Cafe, King’s Guard Museum and Honolulu Surf & Sport. It also features Waikiki’s version of Hollywood’s “Walk of Fame,” displaying the handprints of many Hawaii celebrities.

Black Sand Capital’s other purchases in Hawaii include the majority interest in the Maile Sky Court hotel in Waikiki and the Pearlridge Uptown II section of Pearlridge Center in Aiea.

Photo credits: www.cosmos.com

Bank of Hawaii to Move Ward Branch to Hokua at Ala Moana

By Adriana Pop, Associate Editor

Bank of Hawaii has announced plans to relocate its Ward Plaza branch to the ground floor of the Hokua condominium at 1288 Ala Moana in Honolulu, about half a mile from its current location. Construction for the new offices should begin by the end of February 2013, with completion scheduled for mid-August. DKKY Architecture Studio will design the space.

“This is a great opportunity for the bank, since the visibility, accessibility and parking at Hokua are exceptional. It’s a perfect location, convenient for customers and near the heart of a lot of new development in Kakaako,” Kevin Sakamoto, executive vice president for the bank’s Hawaii Branch Division, commented in a statement.

The move will allow for a smooth transition of services, as the bank intends to close its current Ward branch at 210 Ward Ave. on a Friday and open at the new location the following Monday.

According to the Pacific Business News, the bank will take about half of the soon-to-be-vacated P.F. Chang’s China Bistro space. The restaurant will shut down after serving dinner on Dec. 9 and transfer all employees to its Waikiki location at Royal Hawaiian Center.

In regional news, Kauai County officials have announced the acquisition of two parcels of land in Lihue, to be used for the development of an 84-unit seniors affordable housing project. The county paid $2.3 million for the vacant lots, situated on the site of a former plantation camp known as “Rice Camp.”

“Facilitating affordable housing opportunities for our residents is one of our top priorities,” said Mayor Bernard Carvalho Jr.

The county’s next step will be to issue a request for proposals for the selection of the development team, which will be responsible for the design, financing, construction and management of the Rice Camp project. Funding assistance will be provided, along with a low-cost ground lease, officials said.

Photo credits: www.myhawaiicondo.com

Remodeled Center to Become Maui’s First Outlet Mall

By Adriana Pop, Associate Editor

In November, Honolulu Builders will begin work on the renovation of Lahaina Center on Maui. Called The Outlets of Maui, the project will include 10 existing buildings on 11 acres at 900 Front St. Upon completion, the remodeled center will become the island’s first outlet mall.

The Maui News reports that the project’s developers intend to turn around the center’s historically low occupancy rate and attract more shoppers. Currently, the complex is only 30 to 40 percent leased.

“We’re making the buildings a little more architecturally interesting, with different colors, more glass, and greening up the interior to make it more inviting,” Dan Shiraki, project superintendent for Honolulu Builders, told the newspaper. The Maui Planning Department recently approved the proposed remodeling plan, which seeks to preserve the district’s historic feel. The center’s tenant mix is expected to resemble the one at the Waikele Premium Outlets in West Oahu, currently the only outlet mall in Hawaii.

The Outlets of Maui is being financed by a group of local and mainland investors that signed a long-term land lease agreement with owner Weinberg Foundation Inc. The project is expected to be completed in 10 months and create approximately 50 jobs.

In other news, the Honolulu Department of Planning and Permitting has approved the final environmental impact statement for a $767 million mixed-use project developed by Robertson Properties Group on the site of the former Kamehameha Drive-in property in Aiea.

According to the Pacific Business News, the “Live, Work Play Aiea” development will include as many as 1,500 multifamily homes in five buildings, about 143,000 square feet of retail and restaurant space, and as much as 80,000 square feet of office space.

Construction is expected to create approximately 980 jobs during an estimated build-out period of 13 years, the company said in a news release.

Photo credits: www.to-hawaii.com

Phase Two of Ward Village Shops Welcomes New Tenants

By Adriana Pop, Associate Editor

The Howard Hughes Corp. announced the first tenant for Phase Two of Ward Village Shops, a 57,000-square foot, two-level retail center along Auahi Street in the heart of the Kaka’ako district in Honolulu. Pier 1 Imports will occupy 12,688 square feet at the new retail center, which is scheduled to open in the fall of 2013. The company is relocating from another site within Ward Centers.

“The relocation of Pier 1 Imports sets the stage for future phases of development that will begin the transformation of Ward into a mixed-use community,” said David Striph, senior vice president for Hawai‘i for The Howard Hughes Corp. “The new store will also enable the ever-popular Pier 1 Imports to continue to serve their loyal local shoppers, as well as visitors who come to Ward Centers.”

Seattle-based Nordstrom Inc. also announced it would relocate to a 45,000-square-foot, two-level space at the Ward Village Shops expansion. Nordstrom will be leaving its current 34,000 square-foot Rack at Ward Center, which opened in 2000. The retailer began serving the Honolulu community in 1966 and currently operates a 200,000-square-foot, full-line store at Ala Moana Center.

“Ward Center has been a great home to us, and we’re looking forward to relocating our store within the district to a larger space so that we can better serve the locals and tourists of Oahu,” said Geevy Thomas, president of Nordstrom Rack.

Ward Centers is Honolulu’s premier street destination for local residents and tourists alike. It includes 135 unique shops, as well as 40 restaurants, sidewalk cafes and eateries.

According to a report released by CBRE Group, the average asking lease rate for Honolulu’s retail market registered a slight decrease in the second quarter of 2012, from $3.34 at the end of the first quarter to $3.31. Compared to one year ago, average asking rates are down approximately 4 percent and are expected to maintain a certain degree of stability, the report shows.

Photo credits: The Howard Hughes Corp. via Business Wire

Chart courtesy of: CBRE Group, Inc.

Plans Move Forward for DeBartolo Development’s $350M West Oahu Shopping Center

By Adriana Pop, Associate Editor

The Hawaii Land Use Commission has approved a use change for a proposed 1.4 million-square-foot regional shopping mall in East Kapolei. The Pacific Business News reports that under a previous state plan the site had been slated for the development of a regional sports complex.

Florida-based DeBartolo Development L.L.C. plans to build the $350 million project called Ka Makana Alii on 67.7 acres leased from the Department of Hawaiian Home Lands. San Diego-based Tucker Sadler Architects will design the mixed-use center, along with Architects Hawaii Ltd. and Belt Collins Hawaii.

General contractor Nordic PCL will use about 20 acres for the initial part of the project, which calls for the construction of an approximately 200,000-square-foot neighborhood center. The development will be anchored by Walgreen’s and has already sparked the interest of more than 22 retailers. It is expected to open by 2014. The second part of the project entails the establishment of a major department store, an entertainment center, and hospitality, retail and more than 200,000 square feet of LEED-certified office space.

Upon completion, DeBartolo’s urban center will be the third-largest regional shopping mall in Hawaii. The Ka Makana Alii development is slated to generate as many as 20,000 construction jobs and between 4,000 and 5,000 permanent jobs.

In regional news, Kaiser Permanente Hawaii held a traditional Hawaiian groundbreaking and blessing ceremony at the site of a future 40,000-square-foot medical office building in Kailua-Kona on the Big Island.

According to Hawaii News Now, the new center will be built on approximately 10 acres of land at the corner of Queen Kaahumanu Highway and Honokohau Street. The facility will house about 30 exam rooms and offices for 20 healthcare professionals and is expected to serve more than 20,000 Kaiser Permanente members in the Big Island’s west and north service areas.

Honolulu-based Maryl Group will develop the new clinic, which is expected to replace the existing facility at 75-184 Hualalai Road in Kailua-Kona. The project is scheduled for completion in mid-2014.

Photo credits: www.debartolodevelopment.com

Downtown Office Building Set for Conversion into Student Housing

By Adriana Pop, Associate Editor

Maui developer Greg Hatcher of GC Pacific Inc. plans to turn the vacant 12-story Queen Emma Building in downtown Honolulu into a 130-unit, 260-bed dormitory for students from Hawaii Pacific University.

The Pacific Business News reports that the developer will invest about $9 million into the makeover of the 80,918-square-foot midrise structure affectionately known as the “Pimple Building” due to its brick exterior. Greg Hatcher told the newspaper that he would not make any changes to the outside layer, as he would like to preserve the building’s distinctive look. He expects the new dormitory to open by next year’s fall session.

According to property records, Greg Hatcher purchased the office facility at 1270 Queen Emma St. in September 2010 for $8.7 million. The seller was an affiliate of Honolulu resident Armand Behpour, who had also planned to convert the building into housing for college students before entering into a legal dispute with a development partner.

The Queen Emma Building is adjacent to the Capitol Place and Pinnacle condominium towers and only a couple of blocks from the Hawaii Pacific University campus on Fort Street Mall in downtown Honolulu.

In related news, Thomas Winegar and his wife, Susan Furchgott, are planning to build an apartment complex with 14 three-bedroom units in close proximity to the University of Hawaii at Hilo (UHH) on the Big Island. If approved, the new development could help address the area’s shortage of student housing.

Construction of a similar project is underway on the university’s campus, the Hawaii Tribune-Herald reports. Phase I of UHH’s University Village is expected to bring 300 new beds by next fall.

UHH Relations Director Gerald DeMello told the newspaper that housing continues to be an issue for the growing campus. “The reason that we’re building student housing is because students get admitted every year and then if we can’t provide them with housing, they opt not to come,” De Mello said.

Last academic year, the university experienced record enrollment and was able to provide on-campus housing for only about 15 percent of all freshman students.

Photo credits: www.flickriver.com

Bidding Process Closes for M-U TOD in Kakaako

By Adriana Pop, Associate Editor

The bidding process ended for the Pohukaina Street mixed-use development in Honolulu, which includes the construction of a 650-foot residential skyscraper. The Pacific Business News reports that the Hawaii Community Development Authority (HCDA) received solid bids from at least four developers in Hawaii and China and should reach a final decision by the end of the year.

In January, the state agency issued its final request for proposals for the “690 Pohukaina” project in Kakaako, which will bring two residential towers to the neighborhood. One of the buildings will include 300 affordable for-sale units, while the second structure will offer 500 market-price units. The market-price residential tower will rise more than 200 feet above the First Hawaiian Center, Hawaii’s tallest building at 440 feet. Plans also call for a commercial and civic building, a parking structure, a business innovation incubation space and offices for the state’s library system and Friends of the Library.

The project is slated for a parcel at 690 Pohukaina St., along the route of the planned Honolulu Rapid Transit line, and it is designed to qualify as a transit-oriented development, maximizing access to multiple forms of public transportation. HCDA executive director Anthony Ching told the newspaper that the new development is considered the second phase of a project that includes the Halekauwila Place, an already-approved 204-unit rental housing component developed by Stanford Carr.

The agency estimates that 690 Pohukaina will infuse $500 million into the state’s economy over seven years and create 500 construction jobs and as many as 1,000 indirect jobs. Construction of the two residential towers could start in 2015 or 2016, with completion scheduled for the summer of 2019.

Photo credits: www.skyscrapercity.com

Plans Move Forward for Robertson Properties’ Mixed-Use Project on Oahu

By Adriana Pop, Associate Editor

Los Angeles-based Robertson Properties Group has submitted the final environmental impact statement for the $767 million mixed-use project the company plans to develop on the site of the former Kamehameha Drive-in property in Aiea.

Situated across from Pearlridge Center, the commercial and residential community will include 1,500 multifamily homes, about 143,000 square feet of retail and restaurant space, and as much as 80,000 square feet of office space.

According to the Pacific Business News, the original project was scaled back last fall. Initial plans called for three 350-foot-high towers and two 60- to 80-foot buildings, whereas the revised version proposes one 350-foot tower and four shorter buildings ranging in height from 150 to 300 feet.

If approved, the new development will be known as Live, Work, Play ‘Aiea and will generate a base economic impact of $2.4 billion. Construction is expected to create approximately 980 jobs during an estimated build-out period of 13 years, the company said in a news release.

In regional news, Brookfield Homes Hawaii launched a new phase of Big Island luxury homes at private golf course community KaMilo at Mauna Lani Resort (pictured in the rendering above).

The development will include a gated community of 137 single-family and paired homes, in close proximity to beaches, cultural landmarks and local specialty markets.

“Our new phase of homes will reside on some of the most desirable, undeveloped property on the Kohala Coast and will include an impressive selection of exquisite island-inspired upgrades,” said Jeff Prostor, president of Brookfield Homes Hawaii.

The company’s Priority Reservation program offers buyers the opportunity to select their preferred home site early in the development stages and to choose from a variety of design upgrades.

Residents will have access to a fitness center, two pools, spas and an outdoor gathering pavilion. The three- and four-bedroom homes range from approximately 2,212 to 3,781 square feet, including garage and lanai.

Photo credits: www.brookfieldhawaii.com

State Green-Lights Queen’s Acquisition of Shuttered Ewa Facility

By Adriana Pop, Associate Editor

Hawaii’s Health Planning and Development Agency has approved the sale of Hawaii Medical Center West in Ewa to Queen’s Health Systems for $73.2 million.

According to the Honolulu Star-Advertiser, Queen’s Health Systems will spend $21.2 million to purchase the West Oahu hospital building and land from St. Francis Healthcare System of Hawaii and $52 million in upgrades and equipment. The company expects to reopen the 134-bed facility in August 2013.

Hawaii Medical Center West, along with Hawaii Medical Center East in Liliha, was shuttered in December of last year, as part of the lengthy bankruptcy process of their owner, Hawaii Medical Center (HMC). In April 2012, U.S. Bankruptcy Judge Robert Faris ordered that the two HMC hospitals be returned to their former owner, St. Francis, the largest secured creditor in the company’s bankruptcy.

In May, Queen’s Health Systems signed a letter of intent and confidentiality agreement with St. Francis to explore the feasibility of acquiring and reopening the Ewa facility. Queen’s Health, Hawaii’s oldest health-care system, also owns the Queen’s Medical Center in Honolulu.

In other news, the Office of Hawaiian Affairs (OHA) purchased the 185,787-square-foot Gentry Pacific Design Center in Honolulu. The Pacific Business News reported that the state agency paid $21.4 million for the building and its three parcels, as shown by public conveyance tax documents.

The sale will not have any near-term impact on the existing tenants at the property, which include Indich Collection and Architectural Surfaces Inc. Colliers International Hawaii will continue to serve as property manager. OHA intends to honor current leases and move its offices to the building as space becomes available. Honolulu-based Bishop Street Commercial L.L.C. brokered the transaction on behalf of the seller.

The center was built in 1930 for the American Can Co. and purchased by Gentry Pacific in 1985. The purchase price was almost $8 million. In 2008, the assessed value of the property was about $28.8 million.

Photo credits: www.city-data.com

Maui County Committee Green-Lights West Maui Master-Planned Development

By Adriana Pop, Associate Editor

Maui County’s General Plan Committee voted 7-1 in favor of including the proposed 600-acre master-planned Olowalu Town project within the island’s urban and rural growth boundaries.

Plans for the $466 million development call for 1,500 housing units – half of which would be affordable – a school, a post office, commercial space, a community center, parks, fire and police stations, as well as a small wastewater treatment and solid waste plants.

After the vote, developer Bill Frampton of Wailuku-based Frampton & Ward told The Maui News that he is now one step closer to building the vision of a small town for Maui’s families. “This certainly is a very important step in the process. We’re excited to be able to bring some life back to Olowalu,” he added.

Upon completion, the new West Maui development would have the capacity to accommodate approximately 4,000 residents, while 25 percent of the land would be reserved for agricultural use or open space. During buildout, 150 construction-related jobs would be created annually, the newspaper reported.

Plans for Olowalu Town date back to 2005, but the project received criticism from environmental groups and marine experts, who argued that the development could cause major damage to Olowalu’s reefs, some of which are more than 500 years old. Other opponents expressed concerns that the rural character of the area would be altered and that traffic could become worse along Honoapiilani Highway.

Developer Bill Frampton, on the other hand, stated that the project’s draft environmental impact statement helps address these concerns. According to Will Spence, director of the Department of Planning, the developer’s stormwater runoff capture system goes beyond the current requirements, and some of the proposed traffic mitigations are innovative.

The General Plan Committee also included the Kaanapali 2020 project and the state’s controversial Villages of Leiali’i affordable housing project within the growth boundaries of West Maui.

Overall, the planned housing developments could bring more than 6,500 housing units to the region over the next few decades. The Planning Department estimates that if completed, the projects would generate an oversupply of about 227 percent of demand to the region.

Photo credits: mauifeed.com

St. Francis Prepares to Sell Former Hawaii Medical Center West

by Adriana Pop, Associate Editor

St. Francis Healthcare System of Hawaii expects to sell Hawaii Medical Center West to Queen’s Health Systems.

“Preparing the West Oahu hospital for sale is one of our top priorities in the next few months,” St. Francis President and CEO Jerry Correa told the Pacific Business News.

In May, Queen’s Health Systems, owner of The Queen’s Medical Center in Honolulu, signed a letter of intent and confidentiality agreement with St. Francis to explore the possibility of acquiring and reopening the Ewa facility.

The Hawaii Medical Center West and the Hawaii Medical Center East in Honolulu closed in December 2011, as part of Hawaii Medical Center’s lengthy bankruptcy process. In April, both facilities were returned to their former owner St. Francis, the company’s largest secured creditor.

In other news, Hawaiian Island Homes Ltd. president Peter Savio has closed on the $15 million acquisition of the 61,690-square-foot Newtown Square office complex in Aiea. Savio acquired the property from Kamehameha Schools and plans to convert it into medical condominiums.

According to the Pacific Business News, doctors have renamed the building The Mary Savio Medical Plaza at Newtown, after Peter Savio’s mother. Mary Savio was the first woman president of the Honolulu Board of Realtors and a member of the state Real Estate Commission.

The developer plans to add 45,000 square feet of office space and a four or five-story parking garage on top of the additional health-care floors. Upon completion The Mary Savio Medical Plaza at Newtown will comprise 106,000 square feet of tenant space, the newspaper reports. Honolulu-based Hawaiian Dredging Construction Co. Inc. will serve as lead contractor for the expansion. Construction is scheduled to start in early 2013.

Photo credits: hano-hawaii.org

Larry Ellison Closes on $500M+ Purchase of Lanai from Castle & Cooke

by Adriana Pop, Associate Editor

Larry Ellison, founder and CEO of Oracle Corp., has completed his acquisition of 98 percent of Lanai, Hawaii’s sixth-largest island, from David Murdock’s Castle & Cooke. Financial details of the transaction were not disclosed, although the price is estimated at more than $500 million.

The Pacific Business News reports that with the purchase of Lanai, Ellison becomes the fourth-largest private owner of land in Hawaii, after Kamehameha Schools, Alexander & Baldwin Inc. and Parker Ranch on the Big Island.

Ellison’s purchase included 88,000 acres of land, as well as two resort hotels — the Four Seasons Resorts Lanai at Manele Bay and the Four Seasons Resorts Lanai, Lodge at Koele — and two championship golf courses and club houses, The Experience at Koele and The Challenge at Manele. The state currently owns 2 percent of Lanai, which has a population of about 3,200 residents.

David Murdock took ownership of the island in 1985, with the purchase of Castle & Cooke Hawaii Inc. With the construction of the two resorts he transformed Lanai’s economy from agriculture to tourism.

“It is very gratifying to me personally to see Lanai now in the hands of Larry Ellison, a very committed individual who will bring his ideas and energy to sustain the beauty and heritage of Lanai,” Murdock said in a news release.

In other news, the Kauai Planning Commission has approved Hunt Development Group’s proposed 46,800-square-foot grocery-anchored shopping mall in the center of Kilauea Town.

According to The Garden Island, the Kilauea Lighthouse Village will be located on Kilauea Road, across the street from Kong Lung Center. The project will include a market, hardware store, auto-parts store, drugstore and pharmacy, health clinic, bank, food establishments and office space.

Opponents of the project argued that the new development could harm local businesses and increase traffic in an already congested area. Matt Hunt, development manager at Hunt Group assured commissioners that during construction workers would use a temporary road in the back of the development. The Planning Department eventually granted the permits on the condition the company take action to mitigate traffic in the event the temporary road becomes inoperable.

Photo credits: Wikimedia Commons

Affordable Housing Partners Wins Bid to Purchase Leasehold on 12 City Rentals

by Adriana Pop, Associate Editor

The City and County of Honolulu has selected Honolulu Affordable Housing Partners LLC to complete a leasehold purchase agreement for the City’s 12 rental housing complexes.

In February, the City and County of Honolulu issued a Request for Proposal seeking bids from private companies interested in purchasing, managing and maintaining 12 affordable apartment complexes situated in various parts of Oahu, while leasing the land beneath them for 65 years.

Honolulu Affordable Housing Partners is comprised of Highland Property Development LLC of Arcadia, Calif.; Richard Gushman of Honolulu, who has over 40 years of real estate experience; and Stephen Gelber, a Honolulu real estate and tax attorney who has worked on many affordable housing transactions in Hawaii.

During the 65-year lease term, the purchasers will be required to abide by the current affordable housing rules. Out of a total of 1,257 units, 850 qualify as low/moderate income under HUD guidelines, 189 qualify as gap-income units, and the remainder of the apartments will be rented at market rates.

The City has decided to pursue this type of arrangement since Hawaii experiences a rental housing deficit, which is particularly visible in the affordable sector.

In other news, General Growth Properties Inc. plans to invest $250 million in the expansion of its 2.4 million square-foot Ala Moana Center. The Chicago-based company plans to redevelop the current 340,000-square-foot Sears store and replace it with approximately 700,000 square feet of retail and restaurant space, including a three-level, 160,000 square-foot anchor tenant. Plans also call for a fourth-level parking deck, the Pacific Business News reports.

In April, General Growth completed the acquisition of 11 Sears anchor pads from Sears Holdings Corp. for a total of $270 million. Under the agreement, the lease on the space at Ala Moana accounted for $250 million.  Ala Moana is of the country’s most lucrative malls, with sales surpassing $1,200 per square foot. Sears will continue to operate the store through the end of 2013.

Photo credits: www.panoramio.com

Construction of $350M West Oahu Shopping Center Postponed

by Adriana Pop, Associate Editor

DeBartolo Development LLC announced that construction on the first phase of its $350 million Ka Makana Ali’i regional shopping center in East Kapolei has been delayed until early next year.

The initial part of the project calls for the development of a neighborhood center that will feature a grocery and a drugstore. General contractor Nordic PCL will use about 20 of the total 67.7 acres DeBartolo leased from the Department of Hawaiian Home Lands. The second part of the project entails the establishment of a major department store, an entertainment center as well as hospitality, retail and over 200,000 square feet of LEED-certified office space.

The Pacific Business News reports that retailers have already committed to lease about 80 percent of the initial phase of the project. San Diego-based Tucker Sadler Architects will design the mixed-use center along with Architects Hawaii Ltd. and Belt Collins Hawaii.

Upon completion, DeBartolo’s 1.5 million square foot urban center will be the third largest regional shopping mall in Hawaii. The Ka Makana Alii development is slated to generate up to 20,000 construction jobs and between 4,000 and 5,000 permanent jobs.

In regional news, Larry Ellison, founder and CEO of Oracle, has signed an agreement to purchase 98 percent of Lanai, Hawaii’s sixth-largest island. The Pacific Business News reports that the sale includes two resort hotels — the Four Seasons Resorts Lanai at Manele Bay and the Four Seasons Resorts Lanai, Lodge at Koele — two championship golf courses and club houses, The Experience at Koele and The Challenge at Manele and more than 88,000 acres of land. The purchase price has not been disclosed but it is estimated to be around $500 million.

Lanai belongs to Los Angeles billionaire David Murdock, who took ownership of the land in 1985, with the purchase of Castle & Cooke Hawaii Inc. The state owns 2 percent of the island.

Photo credits: www.debartolodevelopment.com

Hawaii Land Commision Rezones Rural Acreage in Central and West Oahu for Master-Planned Development

by Adriana Pop, Associate Editor

The Hawaii Land Use Commission (LUC) has approved the reclassification of approximately 800 acres of prime agriculture lands, paving the way for the development of the $2.2 billion Koa Ridge master-planned community in Central Oahu by Castle & Cooke Homes Hawaii Inc.

By a 7-0 decision, the commision approved changes in land designation from agriculture to urban. The 5,000-home community would sit on both sides of the H-2 Freeway, between Waipio and Mililani, and include a medical center.

According to the Pacific Business News, the development is expected to create 2,500 permanent jobs, including 1,100 in the medical field, and generate a total of $14 million in annual tax revenue. Moreover, it is estimated that over a period of 15 years, the project will create 750 construction jobs and 1,100 indirect jobs annually.

By an 8-1 vote, the state LUC also approved D.R. Horton’s petition to reclassify more than 1,500 acres of agricultural land between Kapolei, Ewa and Waipahu. D.R. Horton – Schuler is now one step closer to building its 11,750-home Hoopili master-planned community in Ewa: a mix of affordable rentals, senior, multifamily and single family housing options.

The newspaper reports that the project would create 27,000 jobs in construction and related trades during a 20-year period, as well as 7,000 permanent jobs.

Opponents argue that the new developments will have a negative impact on agriculture and traffic. Supporters on the other hand favor the creation of additional housing opportunities for Oahu’s rapid population growth. Furthermore, they argue that Hawaii has more than 280,000 acres of arable, high-quality land reserved for agriculture.

The LUC has approved both developments with certain conditions, mainly related to traffic and transportation concerns. Castle & Cooke will fund any highway improvements related to the project, whereas D.R. Horton will come up with contingency plans that address traffic issues in case the city’s rail-transit project planned between Kapolei and Ala Moana Center is canceled.

Photo credits: www.hoopilioahu.com