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ASSOCIATED PRESS / 2003 The distinctive Lowe's storefront, shown here in Georgia, will be coming to Iwilei near City Mill and Home Depot.

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Iwilei site near
rivals costs
Lowe’s $35M

Analysts predict the retailer
must "poach" from flagship
City Mill and Home Depot

Lowe's Cos. paid more than $35 million for the site of its new Iwilei store, which will operate within walking distance of Home Depot's and City Mill's flagship Oahu stores.

The Mooresville, N.C.-based home-improvement retailer completed its purchase of the Iwilei parcel from oil company ConocoPhillips last month, state land records show.

The property is across Pacific Street from City Mill's 60,000-square-foot hardware store and makai of Home Depot's 136,000-square-foot outlet.

Jennifer Smith, a spokeswoman for Lowe's, declined to comment.

The new Lowe's will be the company's fourth in Hawaii. Lowe's operates home improvement outlets at Waikele Center in Central Oahu; in Kahului, Maui; and in Kona on the Big Island.

Lowe's has long eyed a more central location in Honolulu. In 1999, Lowe's, then known locally as Eagle Hardware & Garden Inc., began negotiations for an 8-acre parcel on Middle Street in Kalihi, but the deal fell through.

In addition to City Mill and Home Depot, the Iwilei district is home to Costco, Kmart and the Dole Cannery retail and office complex. Electronics retailer Best Buy recently announced plans for a 45,000-square-foot Iwilei store at the corner of Alakawa Street and Nimitz Highway.

Marty Plotnick, president of the local marketing analysis firm Creative Resources Inc., said the new store will "poach" business from Home Depot and City Mill.

Plotnick said that the steep land price is analogous to Wal-Mart's land cost for its double-decker Wal-Mart/Sam's Club warehouse store on Keeaumoku Street, which Plotnick said is struggling for foot traffic.

But Plotnick also said the cutthroat competition in Iwilei will mean "more sales on items and loss leaders," to the benefit of local consumers.

"Can we sustain a Lowe's there? Where are the shoppers?" Plotnick said. "It's overkill for Hawaii."

Steven Ai, president and chief executive officer of City Mill, said his company will compete with its new neighbors by continuing to provide value and by "taking care of our customers."

State land records show the new Lowe's property includes land bordered by Nimitz Highway and Pacific Street that stretches back to the makai side of Home Depot's parking lot.

The land also includes a parcel at the corner of Nimitz Highway and Pacific Street that is occupied by BEI Hawaii. BEI is in the eighth year of a 30-year lease.

BEI will remain as a tenant on the property, according to sales documents.