Wednesday, May 15, 2002

Kakaako high-rise planned

The building would be at the
Ala Moana and Auahi intersection

By Tim Ruel

Local developers MacNaughton Group and Koba-yashi Group have agreed to build a luxury high-rise residential tower on four acres in Kakaako owned by Victoria Ward Ltd. on the corner of Ala Moana and Auahi Street, the companies said yesterday.

The units would be offered in fee simple, meaning Ward would eventually sell the property. Other details of the project, such as size, prices and number of units, were not disclosed.

"We hope that this will be the first of a number of residential projects on or near our property," said Mitch D'Olier, president and chief executive of Victoria Ward. He sees the potential for residential development on both the Ewa and Diamond Head sides of Ward's 65-acre retail arena.

Development plans for Ward would fall under the scrutiny of Chicago-based General Growth Properties Inc., which is buying Victoria Ward Ltd. in a deal scheduled to close in July.

The developers are in preliminary discussions with lenders, said Jeff Arce of the MacNaughton Group. A general contractor has not been selected and ground breaking has not been scheduled.

Lenders will want to see sales of units happen first, Arce said. "If it's received well, that might accelerate the ability to break ground. If it doesn't go well, then the project may not ever happen, although we obviously are optimistic that it will," he said.

Units could start selling early next year, said Bert A. Kobayashi, chairman of the Kobayashi Group.

The last luxury residential high-rise to be completed in Honolulu was the nearby Hawaiki Tower, which was finished in June 1999. One problem with Hawaiki, observers said, was that the units were not big enough.

"I think there's a lack of large apartments in Honolulu in general," said Mary Worrall of luxury residential real estate firm Mary Worrall Associates.

If the developers shoot for larger units -- more than 3,000 square feet -- the apartments could sell for about $1 million to $2 million, Worrall said.

For example, her firm is marketing a 3,000-square-foot unit in Hawaiki for $1.65 million.

"I would say between a million and 2 million (dollars) is something that even local people would consider," Worrall said. The individual prices will depend on the types of finishing touches that the developers make to the apartments, she added.

If the per-unit price goes higher than $2 million, the developers would have to seek buyers on the mainland, but there would still be a market, Worrall said.

Big selling points include a clear view of the ocean in front of Ala Moana Beach Park, as well as the nearby shops at Ward, which will be easy to reach by walking, Arce said.

Early concept design for the project is being handled by architectural firm Gary Edward Handel & Associates, whose projects have included the Four Seasons Hotel and Residence in downtown San Francisco and Millennium Place in Boston.

The project will require the approval of the state Hawaii Community Development Authority, which oversees development in Kakaako.

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