Saks on tap
to anchor Ward mall

The retailer has been looking
to open a department store
in Hawaii for years

By Rick Daysog
Star-Bulletin

The developer of a $200 million retail and entertainment complex in Kakaako says it is lining up Saks Fifth Avenue to be the project's anchor tenant.

The new Saks store, which would be the company's first full-line department store in Hawaii, would occupy about 150,000-square-feet near the corner of Ward Avenue and Ala Moana at the current site of Ward Warehouse.

The store would compete with long-time isle retailer Liberty House and newcomers Nordstrom Inc. and Neiman-Marcus Group Inc., which plan to open large department stores at nearby Ala Moana Center.

A Saks spokeswoman said last week that it has not signed a lease for a Hawaii department store and declined further comment. Landowner Victoria Ward Ltd. said it plans to make an announcement about prospective tenants later this summer.

But news of a local Saks department store was disclosed in a brochure produced by Indianapolis-based Simon DeBartolo Group Inc., which is Victoria Ward's development partner.

Simon DeBartolo also featured the proposed Saks department store in promotional material that it displayed at the International Council of Shopping Centers' annual convention in Las Vegas two weeks ago.

Founded in 1924, Saks is one of the nation's premier retailers with 40 department stores, eight resort shops and 34 Off 5th clearinghouse outlets.

Parent company Saks Holding Inc. reported revenues of $1.94 billion for its fiscal year ending Feb. 1.

Locally, Saks has operated a 30,000-square-foot Off 5th store at Waikele Center since 1994.

It also has a big investor in Bishop Estate, which acquired a 5 percent stake in New York-based Saks Holding in 1993.

For the past several years, Saks has pursued a full-line department store in Honolulu.

Philip Miller, the company's chairman and chief executive officer, told the Star-Bulletin in 1994 that Saks was looking at two locations in Honolulu for a 120,000-square-foot to 140,000-square-foot department store: the Keeaumoku superblock and Victoria Ward's property in Kakaako.

According to Simon DeBartolo, the new Saks' department store originally was scheduled to open in the year 2000. But that will likely be delayed by six months to a year after Victoria Ward failed to get approval for a $60 million bond issue in this year's state legislative session.

The bond issue, which would fund a 4,500-stall public parking garage, was scuttled by Senate budget negotiators, who said that taxpayers might have ended up paying for the bonds in case of default. The bond issue was backed by Cayetano administration and Rep. Calvin Say, House Finance chairman.

Mitch D'Olier, Victoria Ward's chief executive officer, said that the bonds wouldn't add risk to the state's bond rating and wouldn't cost taxpayers since interest payments would be covered by the project's revenue.

The bonds also would be backed by assets of Simon DeBartolo, the nation's largest mall builder, which, as an extra precaution, would purchase bond insurance, D'Olier said.

According to Simon DeBartolo, the Victoria Ward project also will include 235,000-square-foot of specialty shops, 126,000-square-feet of entertainment space for a multi-screen theaters, interactive entertainment and other entertainment retail. The 1 million-square-foot project is expected to create 1,700 retail jobs and 1,650 construction jobs and add millions of dollars in state tax collections.