By Craig T. Kojima, Star-Bulletin
The Dole Cannery's owners have had trouble attracting tenants and shoppers to the Iwilei shopping center.

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Dole Cannery's owner
calls off sale of majority interest

Horizon says it will concentrate on leasing

By Rick Daysog
Star-Bulletin

The developer of Dole Cannery has called off efforts to sell an interest in the troubled Iwilei factory outlet center.

Muskegon, Mich.-based Horizon Group Inc. plans to take control of leasing the 250,000-square-foot project and is no longer seeking a joint-venture partner.

"We've put that aside and we're concentrating on leasing the center," said Ron Piasecki, Horizon's chief executive officer.

Piasecki told the Star-Bulletin in March that it was looking to sell up to 75 percent of its stake in Dole Cannery. Horizon, which is developing the Cannery under a 50-year lease with landowner Castle & Cooke Inc., earlier this year held discussions with three or four isle developers to serve as joint-venture partners in the factory outlet center.

The center, which is 40 percent leased, has had trouble attracting new tenants. In February, Horizon wrote off its $32 million investment in the cannery project.

Piasecki said the company is looking to bring in locally based retail tenants. He declined to reveal prospective tenants.

Horizon's new plan received a boost last month when Home Depot Inc. signed a letter of intent with Castle & Cooke to open a 136,000-square-foot hardware store on an 8-acre site next door. The Home Depot store, scheduled to open in early 1999, will increase customer traffic in Iwilei. "We think that retail will work there if it's properly positioned or property marketed," Piasecki said.

He also noted that Horizon is not pursuing plans to build a $45 million aquarium at Dole Cannery. Horizon had been working with Dallas-based Tarlton Aquastar Ltd. to build the aquarium but Piasecki said that has been put on hold due to the weak economy.

Horizon, the nation's largest factory outlet operator, owns and operates 37 properties totaling about 9.4 million square feet.

Some investors and analysts had speculated Horizon would sell many of its properties in the wake of weak results at some large developments. But company Chairman Norman Perlmutter last week ruled out a mass sale of its underpeforming assets, saying the company plans to boost occupancy rates instead.

"I thought they would shave the portfolio a bit if they could," said James Sullivan, an analyst at Prudential Securities Inc.

"The economy is telling us we should do well. The space has been built, it's paid for and now it needs to be filled up," Perlmutter said.