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Wednesday, July 26, 2000

Kaiser to
lease large space
at Cannery

The relocation to the
Iwilei facility is due
to occur by year-end

By Tim Ruel


Dole Cannery in Iwilei will land a new kind of tenant by the end of this year when Kaiser Permanente takes over 90,000 square feet to warehouse and manage all medical records for its clinics statewide.

"It's certainly a boost to the area," said Bob Urquhart, vice president of Castle & Cooke Inc., the shopping center's owner. Kaiser will relocate 150 employees there.

The move reveals a key change in Castle & Cooke's strategy for the struggling Cannery -- away from pure retail to more of a light industrial-retail mix. The change could eventually attract more light-industrial business, real estate agent and retail analyst Stephany Sofos said after hearing the news. "That industrial area has never been conducive to retail," she said.

By leasing 90,000 square feet, Kaiser will be taking up about 16 percent of the roughly 550,000 square feet in the complex. About 215,000 of that total square footage is retail space, according to Castle & Cooke.

In 1997, the center's retail developer Horizon Group Inc. wrote off its entire $32 million investment in the Dole Cannery complex after leases failed to materialize.

Castle & Cooke took over the Cannery a year later and announced plans to rejuvenate it.

Since then, Signature Theatres has opened an 18-screen movie theater there and mainland big-box retailer Home Depot Inc. has opened a 135,000-square-foot home-improvement and building center next door.

Kaiser's new facility will replace about 75,000 square feet of former retail space, plus 15,000 square feet of common areas, including public hallways, Urquhart said.

Kaiser has already signed an agreement to lease the 90,000 square feet. Castle & Cooke plans to sign possibly by Friday, Urquhart said.

Neither Kaiser nor C&C would release specific terms of the agreement other than its minimum length, which is 15 years.

"It's a great location for us, because it's between our Honolulu Clinic and our Moanalua Medical Center," said Norman Quon, Kaiser's director of facility services.

Kaiser currently maintains its records nearby at 801 Dillingham Blvd. and in Halawa, Quon said. The move to Dole Cannery will consolidate those operations, with no layoffs. The space also will house Kaiser's first automated center for ordering prescription drug refills. The former pineapple cannery, founded in 1907, closed after Castle & Cooke began phasing out its pineapple business on Lanai in the early 1990s.

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