Friday, May 7, 2004

Builders to begin
Waikiki face lift

A sky-reaching tower
is just one piece of
the $800 million plan

After nearly a decade in the making, what's old will soon become new again.

A joint venture announced yesterday between Outrigger Enterprises Inc. and kamaaina developer Richard Gushman, co-developer of the Waikele Shopping Center, will start the demolition ball moving to make way for a planned $800 million Waikiki Beach Walk Project.

The project, scheduled to begin in the second quarter of 2005 and be completed in 2007, will turn an aging and congested portion of central Waikiki into a combination of new and refurbished vacation ownership and hotel accommodations. As part of the project, six low- to midrise hotels will be replaced with a single sky-reaching tower, expanses of open space and an old-Waikiki-themed complex of shops, restaurants and entertainment.

David Carey, president and CEO of Outrigger Enterprises, enjoys the Waikiki view from the balcony of the Sunset Terrace Restaurant in the Outrigger Waikiki Hotel.

"This project is very significant because it will reposition an untouched portion of Waikiki," said David Carey, president and chief executive officer of Outrigger Enterprises. "It's been our dream for more than 10 years."

Outrigger began plans to redevelop the 7.7-acre site, which stretches along Saratoga Road, Lewers Street and Kalia Road, in the early 1990s to make it more appealing to guests and to attract new business, Carey said.

"We want this to be a fun, happening place with a family atmosphere that will appeal to both tourists and locals," Carey said. "This will not be an upscale resort designed to attract only Japanese tourists. It will have a much more balanced, international mix."

But it took improved financial conditions, an influx of capital and experience from the right partner to get Outrigger's plans off the ground, Carey said.

"(Gushman's) knowledge of Hawaii's retail market and experience as a developer will help us take the next step toward revitalizing Waikiki," he said.

The first phase of the project, which begins next year, calls for the demolition of three 1950s-era hotels -- the Ohana Edgewater, the Edgewater Lanais and the Ohana Coral Seas -- to make way for a 100,000 square-foot entertainment and retail complex that will front an open plaza on Lewers Street. Outrigger will also renovate the Ohana Reef Towers, turning the 480-room hotel into 193 time-share units.

The second phase of the project, tentatively set for 2007, calls for the demolition of three more hotels: the Ohana Reef Lanai, the Ohana Royal Islander and the Malihini Hotel. These properties will be replaced with a 350-foot tower resort condominium.

Gushman will be in charge of developing the project's retail and entertainment space. Barbara Campbell, vice president of retail development and leasing for Outrigger Enterprises, will serve as the joint venture's leasing director, and Kaolin Corp. will serve as the project broker.

Although an architect has not been named to the retail project, Gushman said he is already seeking tenants for this Waikiki resurgence.

"We are anxious to bring the area alive with restaurants and shops that will appeal to residents and visitors alike," Gushman said. "We want to make this an experience not common outside of Hawaii."

The retail mix will be about 60 percent restaurants and bars, with the remaining space devoted to impulse retail featuring Hawaii products, among other things, Carey said.


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