Kamehameha Schools may lease Kakaako lands intended for condo towers, exec says

Kamehameha Schools will eventually lease the vacant buildings on two three-acre lots in Kakaako, where developers scrapped plans to build at least one luxury condominium tower, the trust’s top executive in its commercial real estate division confirmed to PBN Wednesday.

The state’s largest private landowner is in the midst of concluding matters with The MacNaughton Group and Kobayashi Group, the two developers that planned to build a luxury high-rise tower called Vida 888 at Ala Moana that was shelved because of slow sales. The developers had options to purchase the two parcels.

“We will be looking at leasing opportunities and considering development proposals for those blocks, just as we are with our other remaining blocks in Kakaako,” Walter Thoemmes, managing director of commercial real estate for Kamehameha Schools, told PBN. “At this point, though, our focus is on working with [The MacNaughton Group and Kobayashi Group] on a smooth and orderly transition.”

Kamehameha Schools’ “Our Kakaako” master plan includes nine blocks — four of which are under contract to such developers as Castle & Cooke Hawaii and Stanford Carr Development. Alexander & Baldwin Inc. purchased another parcel, the former CompUSA site, where it is building The Collection condo tower.

Kamehameha Schools, a $11.1 billion trust, is currently in its seventh year of this 15-year plan, which at the start, included seven residential towers that have 2,750 units and 300,000 square feet of commercial space.

Kamehameha Schools’ Kakaako project going as planned, exec says

Walter Thoemmes, managing director of commercial real estate for Kamehameha Schools

Walter Thoemmes, managing director of commercial real estate for Kamehameha Schools

Redeveloping its 30-acre piece of the Honolulu neighborhood of Kakaako is, by far, the biggest commercial real estate development project Kamehameha Schools is currently undertaking.

Walter Thoemmes, managing director of commercial real estate for the $11 billion educational-focused trust, recently told PBN in an exclusive interview, that Kakaako is turning out to be nearly exactly how it planned it to be.

The state’s largest private landowner wanted to make money in an environment that was not just about attracting luxury buyers, but instead a variety of buyers at different price points.

Thoemmes, who only has been at his current top post leading commercial real estate for Kamehameha Schools for a few months, credits his predecessor, Paul Quintiliani, who moved to California to be closer to his family, as the reason for the success in Kakaako.

“It was really Paul and his team that really understood that and structured deals that way,” he said. “If you looked at them side by side, there’s The MacNaughton Group and Kobayashi Group’s luxury project right next to The Howard Hughes Corp.’s luxury projects. Then there’s Alexander & Baldwin Inc.’s The Collection, a step down, Castle & Cooke Inc. and Stanford Carr Development’s projects that we’re doing rentals as part of those two projects.”

Rentals are a good type of housing product for Kamehameha Schools because it can maintain an ownership in the property.

“That is an important consideration when you think of our heritage,” Thoemmes said. “[Bernice “Pauahi” Bishop] only left us land. This whole financial portfolio came from forced land sales. We take the selling of land seriously, so we can have the opportunity to maintain the community and make money on land we own.”

Retail is another strong product for the trust because it is a long-term stabilized cash flow for them.

“We couldn’t get that out of Kakaako until you built the rooftops,” Thoemmes said. “Our plan is 2,750 units. That level of density and resident population will support the commercial we envision in the area for a long time.”

An example of its retail presence being built up in the area is its Salt at Our Kakaako restaurant and retail complex, which is in its final stages.

Retail tenants that fit in with Kamehameha Schools’ plan in Kakaako are resident-servicing, local if possible.

“The things you and I live with, not the big box,” Thoemmes said. “We want more resident-servicing and we’re not done yet.”

Duane Shimogawa
Reporter
Pacific Business News

Office of Hawaiian Affairs looks for short-term users in Kakaako Makai

The Office of Hawaiian Affairs is seeking short-term uses for several parcels in Kakaako Makai, where the agency acquired some 30 acres three years ago from the state of Hawaii in a deal meant to resolve a decades-long dispute.

Peter Apo, a trustee for OHA, told attendees at a recent Hawaii Society of Business Professionals event in Honolulu that it is looking for ideas from developers for about six lots in Kakaako Makai.

On Monday, OHA said it secured a lease with Street Grindz, the company that does Eat the Street, Honolulu Night Market and Art After Dark, at the former Fisherman’s Wharf site for “daily activities.”

“Now that we are landowners, we are on the hot seat,” Apo said at the event, which focused on the area. “We have to do something that people will feel good about. It’s a tricky navigation [process].”

He noted that OHA recently completed its first round of statewide meetings, with more on the way.

“It was a very intensive two-and-a-half weeks of direct engagement with communities across the state,” Apo said.

OHA awarded a nearly $3 million contract to a partnership of four Hawaiian firms, including Edith Kanakaole Foundation, DTL, PBR Hawaii and WCIT Architecture.

The contract, which requires its leadership team to actively get input from the Hawaiian community during the master planning for Kakaako Makai, is expected to take two years to fulfill.

The 30 acres in Honolulu that OHA acquired from the state are valued at an estimated $200 million.

Apo pointed out that all the major landowners in Kakaako, including The Howard Hughes Corp. (NYSE: HHC) and Kamehameha Schools need to work together.

“We will never have an opportunity where you have only three landowners,” he said. “One proposal we had put out there was the three landowners putting Hawaiian plants in Kakaako, and maybe do botanical tours for children.”

Apo said the end result for Kakaako, if all three landowners are on the same page, would be developing a world-class destination for locals and visitors.

OHA’s proposal to build residential high-rises in the area was shot down by state lawmakers last year.

Duane Shimogawa Reporter – Pacific Business News

‘Interim uses’ to be part of Kamehameha Schools’ ‘Our Kakaako’ plan

Alexander & Baldwin Inc.'s The Collection is one of several residential projects underway in Kamehameha Schools' 'Our Kakaako' plan

Alexander & Baldwin Inc.’s The Collection is one of several residential projects underway in Kamehameha Schools’ ‘Our Kakaako’ plan

As Kamehameha Schools enters its sixth year in its 15-year “Our Kakaako” master plan, which covers nine blocks mauka of Ala Moana Boulevard in Honolulu, there may be some parts of the development that will be utilized for “interim uses,” the chair of the trust’s board of trustees told PBN.

Lance Wilhelm, chairman of Kamehameha Schools’ Board of Trustees, said that interim uses describes the trust’s leasing activities within the blocks not yet under construction.

He noted that in those circumstances, as it has done with some of the retail frontage in what will eventually become “Salt at Our Kakaako,” Kamehameha Schools was able to find small businesses that needed flexible space either to incubate an idea or launch a new concept.

“Those uses, while relatively short term, help create excitement and bring new energy to a space that might otherwise sit dormant for an extended period of time,” Wilhelm, the former Kiewit Hawaii executive who is now managing principal for California developer Irongate, told PBN in an email. “Ultimately, it will be the market that dictates the exact nature and timing of any development activity in Our Kakaako, and that market remains very strong today.”

The projects currently underway include Alexander & Baldwin Inc.’s The Collection, Castle & Cooke Hawaii’s 400 Keawe project and Kamehameha Schools’ restaurant and retail center, Salt at Our Kakaako.

“[These] are examples of the active developments we expect to help bring life to Our Kakaako and support Kamehameha’s educational mission,” Wilhelm said. “All nine blocks continue to be planned for development in conformance with the entitlements that are in place, and most of them are already under active construction or in preparation for same.”

Duane Shimogawa Reporter – Pacific Business News

Kamehameha Schools’ may not develop all parcels in ‘Our Kakaako’ plan

A rendering of one of several "Our Kakaako" residential projects in the growing Honolulu neighborhood.

A rendering of one of several “Our Kakaako” residential projects in the growing Honolulu neighborhood.

Kamehameha Schools, Hawaii’s largest private landowner, and one of the major developers of the growing Honolulu neighborhood of Kakaako, probably won’t develop all of the parcels in its “Our Kakaako” plan — at least during this current economic cycle — the chairman of the $9.2 billion trust’s board recently said at a construction industry event.

“These [remaining] blocks will be [utilized] for interim uses,” said Lance Wilhelm, managing member of California-based Irongate and chairman of the board of trustees for Kamehameha Schools.

Thus far, the trust, which is one of the larger landowners in Kakaako, has contracted with some of the state’s most well-known developers, including Alexander & Baldwin, Castle & Cooke Homes Hawaii, Stanford Carr Development, The MacNaughton Group and Kobayashi Group, to build housing projects on those parcels.

Our Kakaako consists of nearly 30 acres on nine city blocks, seven residential towers that include 2,750 units and 300,000 square feet of commercial space.

It’s not quite clear which blocks won’t be developed.

The Howard Hughes Corp., the single entity that owns the most land in Kakaako, is conducting a different approach to developing its parcels.

The Texas-based developer is developing its own master-planned community, which is being dubbed, “Ward Village.”

It has development rights to some 20 high-rise towers in the area.

PBN reached out to Kamehameha Schools and Wilhelm for comment on Tuesday.

Duane Shimogawa Reporter – Pacific Business News

Alexander & Baldwin paid $23M to buy Kakaako lot from Kamehameha Schools

This rendering shows The Collection, A&B Properties' planned 466-unit mixed-use condominium project it plans to build on the former CompUSA site in Honolulu's Kakaako neighborhood.

This rendering shows The Collection, A&B Properties’ planned 466-unit mixed-use condominium project it plans to build on the former CompUSA site in Honolulu’s Kakaako neighborhood.

Alexander & Baldwin Inc.’s real estate subsidiary paid $23 million to Kamehameha Schools to purchase the three-acre former CompUSA lot in Kakaako, the site of the Honolulu-based developer’s 465-unit mixed-use The Collection condominium project, according to public records.

In October, A&B Properties Inc. said it purchased the lot, which is bounded by Ala Moana Boulevard, and Auahi, South and Keawe Streets, from Kamehameha Schools for an undisclosed price.

The $200 million project, which is made up of three residential components — The Tower’s 397 units, The Lofts @ The Collection’s 54 units and 14 urban townhomes — began construction in October at the 600 Ala Moana Blvd. site.

The tower part of the project is more than 75 percent sold, while the lofts sold out within a day. The townhomes are expected to be on the market before the end of the year.

A&B Properties said that Hawaii residents represent 85 percent of buyers to date of the tower and loft components of The Collection.

The project is estimated to be completed in late 2016.

Duane Shimogawa Reporter – Pacific Business News

Alexander & Baldwin buys land at its planned The Collection condominium in Kakaako

This rendering shows The Collection, A&B Properties' planned 466-unit mixed-use condominium project it plans to build on the former CompUSA site in Honolulu's Kakaako neighborhood.

This rendering shows The Collection, A&B Properties’ planned 466-unit mixed-use condominium project it plans to build on the former CompUSA site in Honolulu’s Kakaako neighborhood.

Alexander & Baldwin Inc.’s subsidiary has acquired the three acre former CompUSA lot in Kakaako from Kamehameha Schools that it will use to develop its 466-unit mixed-use The Collection condominium project. Construction is scheduled to start soon and estimated to be completed in late 2016.

Terms of the deal were not disclosed.

Located at 600 Ala Moana Blvd., the $200 million project is made up of three residential components.

The Tower, which is currently 76 percent sold, and includes 397 units in a 43-story building, is the project’s initial component.

The second phase is The Lofts @ The Collection, which consists of 54 condo residences within a four-story mid-rise building, and sold out in less than a day.

Plans for the final phase of The Collection, 14 urban townhomes, will be announced at a later date.

The Collection, which is bounded by Ala Moana Boulevard, and Auahi, South and Keawe Streets, also has 13,000-square-feet of commercial space planned for shops and restaurants.

Duane Shimogawa Reporter – Pacific Business News

Hawaii agency approves Castle & Cooke-Kamehameha Schools condominium project

This rendering shows a workforce housing complex being developed by Castle & Cooke Homes Hawaii and Kamehameha Schools in the Honolulu neighborhood of Kakaako. Courtesy Kamehameha Schools

This rendering shows a workforce housing complex being developed by Castle & Cooke Homes Hawaii and Kamehameha Schools in the Honolulu neighborhood of Kakaako.
Courtesy Kamehameha Schools

The Hawaii Community Development Authority on Tuesday unanimously approved a joint development by Castle & Cooke Homes Hawaii and Kamehameha Schools that will add 183 condominium units on Keawe Street in Honolulu.

Castle & Cooke’s portion of the project will include 95 condos in a 65-feet-high mid-rise building in Kakaako. Seventy-five of the units will be sold at market prices and 20 units will be considered affordable housing.

The company said in a statement that it was pleased by the authority’s decision. This the company’s first condo project in urban Honolulu.

“The project will provide distinctive home ownership opportunities for working families that is located close to downtown Honolulu and the future transit line,” Bruce Barrett, executive vice president at Castle & Cooke, said in a statement.

The project also includes 9,680 square feet of retail space, 145 parking stalls and 1,411 square feet of open space.

Kamehameha Schools’ part of the project includes 88 workforce housing condos, 165 parking spaces and 10,066 square feet of recreation space.

At a recent public hearing, only one person spoke against the project.

Bill Cresenzo Reporter – Pacific Business News

More towers on the rise – Three developers present the neighborhood board with proposals for a half-dozen new projects

20140529_a1big20140529_progressKakaako is in the middle of a residential tower development wave that builders see as meeting overwhelming homebuyer demand, but some area residents see as crowding their quality of life.

Well, don’t look now, but another wave is on the way.

Three developers have unveiled plans to seek permits later this year for six more residential towers in or on the edge of Kakaako with more than 1,000 new units.

Four of the new towers are part of the Ward Village master plan by Ward Centers owner Howard Hughes Corp. One is part of the Our Kakaako master plan by Kamehameha Schools. And one is adjacent to Ala Moana Center and the city’s planned rail station there.

The six new projects are on top of 15 towers in or on the outskirts of Kakaako with a combined total of roughly 5,400 units under construction, permitted, in permitting or recently completed.

Local housing market analyst Ricky Cassiday said the newest tower plans reflect an eagerness by developers to meet market demand and perhaps get projects approved before state lawmakers have an opportunity next year to change Kakaako development rules in response to public outcries as they did earlier this year.

“Developers like certainty, and change is in the air,” Cassiday said. “There is the political cycle next to the economic cycle.”

Local economists have said that Hawaii population growth is outstripping housing production, and that even 5,000 condominiums delivered over the next two years will make only a dent in the shortage.

Far fewer homes are being built elsewhere in Honolulu — mainly single-family houses and townhomes in the suburbs — making Kakaako ground zero for housing production on Oahu.

Eugene Tian, the state’s chief economist, recently said that 3,525 new homes need to be added on Oahu annually to match an anticipated population growth of 1 percent, assuming 2.8 people per household. Over the past three years, 1,612 residential units were approved for construction per year on average, which leaves a deficit of 1,913 homes.

“We are behind,” Tian said.

Cassiday agrees that there is strong demand from residents forming families, though he also said added demand is coming from part-time residents and investors outside Hawaii.

“There is an inexhaustible demand from abroad,” he said. “Things have been under­supplied for a very long time.”

The most aggressive developer in Kakaako responding to such demand appears to be Hughes Corp. with its Ward Village plan that envisions up to 4,300 residential units in 22 towers covering 60 acres at Ward Centers.

Hughes Corp. has three towers with 915 combined units already approved and slated to begin construction later this year. On Tuesday, the company told the Ala Moana-Kakaako Neighborhood Board that it plans to seek permits later this year for another four towers.

Two of the new Ward Village towers have a combined 230 units, including some low-rise townhomes, and replace most of Ward Warehouse along Ala Moana Boulevard.

Another tower with 220 units would be just Ewa of the Ward Entertainment Center theaters.

A fourth tower with an undetermined number of units is planned next to a recently announced Whole Foods store mauka of the theaters.

This four-tower second phase of Ward Village also includes retail and a large landscaped pedestrian plaza around which the four towers are planned, according to Nick Vanderboom, vice president of development for Hughes Corp.

“This will be the start of what will be about a 4-acre village green connecting Kewalo Basin up to where the future rail stop will be near where Ross is today,” he told the board.

a couple of blocks away, Kamehameha Schools is working with local development firm The Kobayashi Group to build a 265-unit tower on a 3.5-acre site occupied by Cutter Nissan between Ala Moana Boulevard, Koula Street and a closed-off portion of Auahi Street.

Matthew Pennaz, a Kobayashi Group senior project manager, speaking at the same neighborhood board meeting on Tuesday, said the company considers the block the “crown jewel” of nine blocks in the Our Kakaako master plan.

“We’re excited to be part of the community,” he said.

Pennaz said a price range for tower units hasn’t been determined yet. Cassiday, however, said a tower on that site most certainly would be a luxury product.

Both the Our Kakaako tower and Ward Village towers will need approval from the Hawaii Community Development Authority, the state agency regulating development in Kakaako.

Existing residents in the area, many of whom live in condos next to proposed towers, have complained about the agency “rushing” public hearings on tower permits over the past couple of years, and contend that more towers can’t be supported by infrastructure such as roads and sewers.

HCDA officials insist that sufficient sewer capacity was created to handle all the proposed development under a 4-decade-old vision to concentrate dense urban development in Kakaako that relieves pressure on rural and agricultural lands on Oahu.

The city considers sewer and water connection requests per project, and has approved all of them to date.

The developers will need to produce traffic studies and mitigation plans. The projects are likely to slow traffic in the area, but not to an extent that would keep them from proceeding, based on past decisions regarding other developments.

The issue of rapid development in Kakaako led to several bills introduced in January at the Legislature, including one calling for a moratorium on development in the area and one abolishing HCDA. Only one bill passed, and will reconstitute the agency’s board of directors next year among other more minor changes.

Larry Hurst, area neighborhood board chairman, is supportive of HCDA’s mission established by the Legislature in 1976.

“All those years ago, Kakaako was (thought of as) the place to get people to live in the (primary urban core),” he said. “When it finally comes (close to happening), only the newbies start talking. I ask people, ‘Where have you been for 37 years?’ It’s like, you can’t move in next to a hospital and then start complaining about the ambulance.”

The third new project presented to the neighborhood board Tuesday is a 234-unit tower slated at 1391 Kapiolani Blvd. next to Ala Moana Center a block Ewa of the Nordstrom store fronting Kapiolani, Kona Street and Kona Iki Street just outside Kakaako’s Piikoi Street border.

In 2007, an affiliate of South Korea-based SamKoo Development Co. Ltd. bought the 1.4-acre site that formerly hosted a car dealership and announced plans for a luxury condo tower. However, Hawaii’s real estate market was approaching a turndown in the face of a recession and the project was put on hold.

Lowell Chun, a consultant for SamKoo, told the board that the developer has revised its plan to fit with the city’s new rail station that will be the Honolulu terminus of the line from Kapolei.

“It’s a rail line anchor,” he said. “It’s a destination.”

Chun said SamKoo is offering to provide a slice of its property along Kona Street for rail use, and would like to create a public area with commercial shops on the tower site integrated with the city’s rail station.

“We are right there,” he said. “What we would like to create is a landmark building for this landmark location — something that signifies that this is someplace special.”

Chun said SamKoo hopes to submit a permit application with the city within the next few months under interim transit-oriented development rules pending before the City Council, provided the rules are adopted.

A maximum height under interim rules being considered would be 450 feet, up from the site’s existing 250-foot limit, though Chun said the 1391 Kapiolani tower is planned to rise 420 feet.

The Neighborhood Board did not vote on the projects.

Developers of the three projects all expect to seek permits this year but did not project construction timetables if their towers are approved.

http://www.staradvertiser.com/newspremium/20140529_MORE_TOWERSONTHERISE.html?id=261062511&c=n

Kamehameha Schools to begin construction on Salt retail project in Honolulu this month

This rendering shows the interior of the warehouse shops planned for the Kamehameha Schools Salt project in Honolulu's Kakaako neighborhood.

This rendering shows the interior of the warehouse shops planned for the Kamehameha Schools Salt project in Honolulu’s Kakaako neighborhood.

Kamehameha Schools to begin construction on Salt retail project in Honolulu this month
Duane Shimogawa Reporter – Pacific Business News

Kamehameha Schools will begin construction later this month on its 76,000-square-foot retail and restaurant project in Honolulu called Salt at Our Kakaako, Hawaii’s largest private landowner said Monday.

Salt, which is located on the block bounded by Ala Moana Boulevard and Coral, Keawe and Auahi streets, involves the adaptive reuse of four structures, as well as the new construction of a 267-stall parking structure along Keawe Street and a 4,500-square-foot building on Coral Street. It’s expected to be completed in 2015.

Existing surface parking will be converted to an open plaza with a splash-and-play water feature, as well as recreation and seating areas.

“The challenge to reuse these older warehouses and their materials creates an opportunity to build a beautifully gritty shopping and dining experience that can only exist in urban Honolulu,” Kamehameha Schools Senior Asset Manager Christian O’Connor said in a statement. “This project is uniquely Hawaii. It isn’t a cookie-cutter mall that could be imported or transplanted from somewhere else.”

Honolulu-based Hawaiian Dredging & Construction Co. is the project’s general contractor, while Honolulu’s Ink Architects is the project’s lead architecture firm.

Tenants, such as Cocina, Limb, Quince and Pad HI, will be moving from their current locations to vacant spaces along Auahi Street to make way for construction. Auahi Street tenants, including Bevy, Paiko, Insomnia Cafe and ZenBanx, will remain open in their current locations.

Other businesses on the Salt block, including Hank’s Haute Dogs on Coral Street, the Our Kakaako Information Center on Keawe Street, as well as Sprint, Starbucks, Lanikai Juice, Illest, The Collection sales office and Highway Inn will also remain open during construction.

Kamehameha Schools has already renovated the Ala Moana Boulevard-fronting portion of the block with the 2012 redevelopment of Six Eighty Ala Moana, a 54-unit income-restricted, rental apartment building with ground floor commercial space.

Company Disclaimer: Information is deemed reliable but not guaranteed.