For David Striph and Nick Vanderboom, transforming a major part of Honolulu into a mixed-use community has become personal.
The top Howard Hughes Corp. executives in Hawaii plan to call Ward Village home. And they want the 60-acre development in Kakaako to be a place where people want to live, work and play.
To that end, they are trying to make the giant Mainland-based corporation they work for part of the local community.
Ward Village, which in its first phase alone represents more than $1.25 billion in local economic impact and nearly 9,000 direct and indirect jobs throughout Oahu, is one of about 30 projects in 16 states for the Dallas-based Howard Hughes Corp., which has approximately 1,000 employees and $5.3 billion in total assets.
Despite its size and lack of proximity to Hawaii, the company takes its Honolulu assets seriously, Striph and Vanderboom say.
“I have two young daughters,” said Striph, senior vice president of The Howard Hughes Corp., who oversee the company’s assets in Hawaii. “We’re hoping to create that environment where young people want to come back to and live.”
Vanderboom, senior vice president of development, who oversees the company’s strategic direction in Hawaii, agrees.
“It’s personal,” he told PBN. “All of us live here. It’s just building a place we are going to live in. We plan to be here a long time. We have our hands full with this project.”
Striph and Vanderboom began working on what is now Ward Village about four years ago. Two years later, they unveiled an urban master plan that includes four components on four separate blocks that eventually will double the retail, dining and entertainment space in Kakaako.
Ward Village has development rights for 22 high-rise towers and up to 9.3 million square feet of mixed-use space, including more than 4,000 residential units and about 1.5 million square feet for retail and other commercial use.
The redevelopment aims to create a distinctively different character for the neighborhood with new buildings along Ala Moana Boulevard being pulled back from the street, establishing what The Howard Hughes Corp. is calling a new face for the neighborhood.
“Dave and I have been here since the start,” Vanderboom said. “We spent a lot of time planning and preparing.”
Striph said that throughout the process it has brought on more than 40 people during the last four years, growing almost four-fold.
The Howard Hughes Corp., which acquired the property two years ago from Chicago-based General Growth Properties Inc., the owner of nearby Ala Moana Center, turned its focus for Ward Village from retail to creating an overall community.
“Retail was [GGP’s] focus,” Striph said. “We try to create a community with a shopping aspect with wide sidewalks, bike paths and other features.”
Staying true to Hawaiian culture
During the planning phases, Striph said the company made a point to invite Hawaiian culture experts and other community members to get involved.
“We invited them to meetings and we were a very open book with everyone,” he said. “We asked them for their input. We were completely open.”
Striph noted that the company knew the area’s history, especially with GGP’s experience in 2008. The former owner of the Ward Village Shops discovered ancient human remains on the site, halting construction of a Whole Foods store. The grocery chain eventually pulled out of the project before the building was completed, but announced plans earlier this year to return to open its flagship Hawaii store as part of a mixed-use project in Ward Village.
“The group we consulted with, they aren’t anti-development and they acknowledged that this is the right place to do it,” Striph said.
Vanderboom said the company has done what it said it was going to do in terms of its Ward Village plan.
“If we do it right, they are completely supportive of it,” he said.
Another example of the company’s effort to infuse cultural aspects into Ward Village is through the architecture of its towers.
“We try to make sure our architects are able to keep the Hawaiian aspects,” Striph said. “We also volunteered to turn all of the buildings mauka to makai. We even adjusted the park, altered its axis and created a pathway to the harbor to Central Kakaako. We also shrank floor plates of the buildings.”
State Rep. Scott Saiki, D-McCully-Downtown, who lives in Kakaako, says he feels that The Howard Hughes Corp. wants to do a good job.
“I know they spent some time and resources initially, learning about the culture and history of Kakaako before they started to develop their plan,” he said. “They incorporated what they learned into their plans. Obviously, they have capital and I’m hopeful they will use capital for the larger community. In a sense, we are fortunate that a company with capital is willing to make investments here.”
Deep pockets
Striph pointed out that the company has lots of cash on hand and is able to execute on its development projects to get to the point to finance them.
Earlier this month, The Howard Hughes Corp. said it secured a $600 million construction loan from Blackstone Real Estate Debt Strategies to build its Waiea and Anaha condo towers.
Thus far, it has signed contracts for more than three-quarters of the 482 total units in Waiea and Anaha. As of Nov. 1, it had contractural agreements for about 84 percent of the units in its Waiea tower and 71 percent in its Anaha tower.
Pre-sales for its first two market-rate residential condominiums at Ward Village started on Feb. 1 of this year and, as of Nov. 1, the company had received $139 million in buyer deposits, representing $783 million of sales revenue, according to its third-quarter earnings report.
It also noted that, as of Sept. 30, it had spent $38 million in development costs for the construction of Waiea, with total development costs expected to be about $403 million when the project is complete.
In terms of Anaha, as of Sept. 30, the developer had spent $17.5 million in development costs for the project, and total costs will reach about $401 million when the tower at the former Pier 1 Imports site is finished in early 2017. Work on the Anaha started over the weekend.
The 206-unit ONE Ala Moana condo high-rise atop Nordstrom’s parking garage at Ala Moana Center, which is being developed in a 50/50 venture with Honolulu’s The MacNaughton Group and Kobayashi Group., is now about 87 percent complete with an expected opening by the end of this year.
Confidence in the market
“There is a huge unmet need for housing [and] we are trying to create housing for all types of income levels,” Striph said. “We are confident in the market.”
The Howard Hughes Corp. will stay with its plan in Hawaii, Striph said.
“[We’ll] keep marching through and listening to the community and taking that feedback and trying to improve the city,” he said. “We have this really unique opportunity to create something that’s never been created before.”
Jack Tyrrell, president of Honolulu-based Jack Tyrrell & Co. Inc., hopes The Howard Hughes Corp. will be in Hawaii for the long haul. He has accumulated $100 million in sales — 21 units in Waiea totaling $70 million and 17 units in Anaha totaling $30 million.
“They have this huge 60-acre drawing board that nobody has,” Tyrrell said. “They have the financial resources and expertise and motivation to create a remarkable, one-of-a-kind livable, workable, fun community.”
He said he has witnessed many local buyers, including people re-locating and investing, as well as Mainland China buyers and others from Chicago, California and Canada.
May Lew Tyrrell, executive vice president and marketing director for Jack Tyrrell & Co., said The Howard Hughes Corp. will have to meet everyone’s expectations and surpass expectations.
“I think they’re fully capable of doing that,” she said. “I think they will over-deliver to the buyers. They’ve got 22 projects over 20 more years. They cannot make any big mistakes, and I don’t think they will.”
The story behind the name
The Howard Hughes Corp. is named for the famed aviator, film director and recluse who was born in 1905 in Houston, Texas, and died in 1976 at the age of 70.
Hughes inherited his family’s successful oil tool business and began investing in films, including producing the hit “Hell’s Angels.”
He also got into real estate. In the 1950s, he acquired land in Las Vegas and developed the master-planned community of Summerlin, which he named for his grandmother, Jean Amelia Summerlin. A couple of decades later, the company was renamed the Summa Corp., and in 1994 it became The Howard Hughes Corp.
The Dallas-based real estate development and management firm was later sold to the Rouse Co. and became part of Chicago-based General Growth Properties Inc., which owns Ala Moana Center. Emerging from bankruptcy, GGP spun off The Howard Hughes Corp. as a public company in November 2010, and it assumed ownership of all of GGP’s planned developments, including master-planned communities such as what is now known as Ward Village.
Today, The Howard Hughes Corp. is an independent company, traded on the New York Stock Exchange under the symbol “HHC.”
The Howard Hughes Corp.
• Founded in 2011 and headquartered in Dallas, Texas
• Owns, manages and develops commercial, residential and mixed-use real estate throughout the country, including master-planned communities, operating properties, development opportunities and other assets spanning from New York to Hawaii.
• About 1,000 employees
Top executives
David Weinreb, CEO
Grant Herlitz, President
William Ackman, Chairman of the Board
Financials
New York Stock Exchange: HHC
Stock earlier this week: $148.33 per share
As of Sept. 30, 2014:
• Total assets: $5.3 billion
• Total revenue: $119 million
• Net income: $51 million
• Developments in 16 states
Master-planned Communities
• Bridgeland (near Houston)
• Maryland
• Summerlin (near Downtown Las Vegas)
• The Woodlands (near Houston)
HHC Operating Properties
• Columbia Office Buildings (Maryland)
• 110 N. Wacker Drive (Downtown Chicago)
• Cottonwood Square (Utah)
• Landmark (Northern Virginia)
• Park West (Arizona)
• The Outlet Collection at Riverwalk (New Orleans)
• South Street Seaport (Lower Manhattan)
• Ward Centers (Now Ward Village Shops)
• Downtown Summerlin
• Woodlands Operating Properties
Strategic Developments
• 3 Waterway Square (Texas)
• Alameda Plaza (Idaho)
• ONE Ala Moana (Honolulu)
• AllenTowne (Dallas)
• The Bridges at Mint Hill (Charlotte)
• Maui Ranch Land (no plans to develop)
• Century Plaza (Alabama)
• Circle T Ranch (Dallas)
• Volo Land (Illinois)
• Cottonwood (Utah)
• The Outlet Collection at Elk Grove (California)
• Fashion Show Air Rights (Las Vegas)
• Kendall Town Center (Miami)
• Ward Village (Honolulu)
• West Windsor (New Jersey)
Source: The Howard Hughes Corp.
Ward Village Plan
The Howard Hughes Corp. plans to redevelop Ward Centers in Kakaako into Ward Village during the next decade.
The plan for the 60 acres includes adding 4,000 high-rise residential units and more than a million square feet of retail and commercial space, as well as open spaces and pedestrian-friendly streets.
Ward Village has received LEED Neighborhood Development Platinum certification, making the Honolulu project the nation’s largest LEED-ND Platinum-certified project and the only LEED-ND Platinum-certified project in the state.
The company has the development rights for 22 high-rises in Kakaako.
Phase One
Projected for completion in 2016, it includes development of three residential towers and a new sales and information center in the iconic IBM building.
The first phase represents more than $1.25 billion in local economic impact and thousands of direct and indirect jobs for Oahu, according to a study by ALH Urban & Regional Economics.
Phase Two
Early in its planning stages, this phase includes developing the first portion of Ward Village’s four-acre public park, which will be privately maintained and will open up a mauka-to-makai pedestrian connection from the center of Kewalo Basin Harbor to the heart of Ward Village. It will include water elements flowing toward the ocean, public seating, native plants and walkways.
It also includes Ward Village Gateway, the first mixed-use residential and commercial development project, which will be located at the gateway to Ward Village along Ala Moana Boulevard where Ward Warehouse is currently located.
The project, which the Hawaii Community Development Authority approved this week, will include a public park, two residential towers with 236 total units and about 20,000 square feet of retail along Auahi Street.
It also will include the Whole Foods-anchored project on the corner of Kamakee and Queen streets. This project includes a 50,000-square-foot Whole Foods and 12,000 square feet of additional retail space, as well as 466 residences.
Current projects
Ward Village Foundation: Launched in January with an initial commitment of $1 million to the local community over two years, the foundation, which has contributed $305,000 to local nonprofits thus far, is aimed at supporting “forward-thinking initiatives.”
Community events: They include the Kakaako Farmer’s Market, the Courtyard Cinema monthly film series, Ward Village weekly yoga series and Art+Flea.
Kewalo Basin Harbor: The Howard Hughes Corp. took over management of the Kewalo Basin Harbor in September and is considering redevelopment options for the aging small-boat harbor, including upgrading restrooms, adding food service and a convenience store for boaters, security and other improvements.
Ward Village Information Center and Sales Gallery: The center is located on the first level of the recently renovated IBM building, along with a sales gallery on the sixth level. The space is open to the public daily during regular business hours.
Waiea and Anaha: Currently underway are the first two residential towers at Ward Village. Waiea, located at 1188 Ala Moana Blvd. on the surface parking lot across from the movie theaters, broke ground in June and will have 171 residences. Anaha, located at 1108 Auahi St., recently broke ground on the former Pier 1 Imports site and will include 311 units. Both towers will include retail and restaurants fronting Kamakee and Auahi streets.
988 Halekauwila Street: Located across from Sports Authority on the corner of Ward Avenue and Halekauwila Street, this tower may include 424 residences, 375 of them priced for local residents with incomes at the reserved housing levels in Honolulu. It also is being considered as an affordable rental project.
Top Howard Hughes Corp.’s executives in Hawaii
David Striph , Senior Vice President
Striph oversees the company’s assets in Hawaii. He has more than 25 years of experience in commercial real estate and was previously a senior managing director at Westmount Realty Capital, a Dallas-based real estate investor. He also has held senior positions at Fortress Investment Group, Fremont Investment and Loan and Amresco Capital Trust. The former CPA is experienced in finance, acquisitions, and asset management.
He and his wife, Carole, moved to Hawaii from Dallas in January 2011. He is an avid boater, wakeboarder and wakesurfer and is a die-hard Jimmy Buffett fan.
Nick Vanderboom , Senior Vice President of Development
Vanderboom oversees the company’s strategic development in Hawaii. Before joining the company in 2010, he was vice president of development for TPMC California and earlier worked as an independent real estate consultant for Forest City Enterprises on mixed-use development projects in California, Nevada, Texas and Hawaii. He also worked at Allan D. Kotin & Associates, a Los Angeles-based real estate consulting firm specializing in public-private joint ventures.
Vanderboom earned a Master of Real Estate Development degree in 2007 from the University of Southern California and received his undergraduate degree in business from USC in 2006. He was a tight end on USC’s football team, winning two national championships and five Pac-10 (now Pac-12) championships.
Race Randle , Senior Director of Development in Hawaii
Randle oversees master planning and development within the 60-acre transformation of Ward Centers into the mixed-use community of Ward Village. He most recently managed residential development activities in Hawaii for Forest City Enterprises and Castle & Cooke Hawaii.
Bobbie Lau , Senior General Manager of Ward Village Shops
Lau supervises the day-to-day operations of The Howard Hughes Corp.’s Hawaii portfolio of properties, including contracted services, marketing, capital improvements, construction at existing assets, tenant relations and financial reporting.
Before joining the team at Ward Village, she was senior vice president of Colliers Monroe Friedlander, now known as Colliers International Hawaii, where she was responsible for the company’s property management division throughout the state for more than a decade.
Lau is vice president of the Kakaako Improvement Association and previously served on the boards of the Building Owners and Managers Association of Hawaii and the Institute of Real Estate Management, Hawaii Chapter.
Duane Shimogawa Reporter – Pacific Business News