If They Build It....

Construction has been hard on the neighborhood, but many agree that the result will be worth it

A $535 million renovation project cannot be done quietly.

The steady din of construction vehicles and trucks, pounding nails and beeping equipment along Kalakaua Avenue, Saratoga Road and Lewers Street has continually announced to passers-by that Waikiki Beach Walk is ushering in a new era.

The long-awaited project has been rough on the visitors, kamaaina and district residents who frequent the area. It has brought 20 months of increased noise, traffic and congestion. It has resulted in fences, boards and barriers, and confusion.

"We realize the construction might cause some temporary inconveniences, but we and our neighbors agree that it will be well worth it once Waikiki Beach Walk is completed and open," said Mel Kaneshige, Outrigger's senior vice president.

Sections of Helumoa Road between Beach Walk, Lewers Street and Kalia Road were closed for a time, as was a section of Kalia Road between Beach Walk and Lewers Street. Some stores and restaurants went out of business, and others have seen business drop since renovations began in 2005.

And while Outrigger already has opened large portions of its Waikiki Beach Walk project, the first phase is not expected to be completed until about midyear, when the bulk of tenants will have finished remodeling. The second phase, capped by the Trump International Hotel & Tower, which broke ground last month, will last into 2009.

"It's been really tough," said Kimberlee Nihei, general manger of the Little Hawaiian Crafts store, operating for 26 years at the neighboring Royal Hawaiian Shopping Center, which is undergoing its own redevelopment. "We started to notice a decrease in foot traffic when that whole thing on Lewers started about two years ago."

Nihei does not expect to see real results until all the construction surrounding her store stops. The store has survived because 75 to 80 percent of its business comes from repeat customers, Nihei said.

"But we've lost the people who used to stumble upon us," she added.

Keeping business steady and customers satisfied during the renovation has been tricky for Outrigger as well, said Barry Wallace, the company's vice president of hospitality services.

Outrigger has had to remove rooms from its rental inventory during the renovation and offer specialty discounts to get customers to willingly occupy rooms near construction zones, Wallace said.

The company currently has several hotels under renovation, including the Outrigger Reef, Honolulu Airport Hotel and Ohana Islander Waikiki, he said.

About 268 out of 860 rooms at the oceanfront Outrigger Reef are out of service as the company modernizes it into a 630-room property that will offer more space for guests.

"We've been doing Reef renovations building by building so that there are no guests in the buildings that are being renovated," Wallace said.

Guests who have been inconvenienced by the noise have been offered dinners or discounts, he said. In the past the company also has offered specialty construction rates to keep occupancy up while construction is in progress.

"We really haven't had a lot of complaints," Wallace said. "People love the construction specials. They're better than our kamaaina rates."

Construction specials are currently being offered at the Ohana Islander Waikiki, where he expected renovation to be ongoing through late January or early February, he said.

An "Ohana Waikiki Connection" package also was launched recently, offering guests free local and long-distance phone calls, Internet, trolley service, newspapers, an in-room safe and coffee.

"It's been warmly received, particularly by the Japanese market," Wallace said.

An added benefit to hoteliers during this difficult time is that room compression has helped make room rates rise, said Joe Toy, president of Hospitality Advisors LLC.

Overall reinvestment in Waikiki has also brought the benefits of increased property values and a greater tax base. However, some Waikiki residents have seen their quality of life drop temporarily because of the construction.

"This is the busiest that Waikiki has been in the last decade. It's been really good for Waikiki; of course, some people in the immediate area are unhappy," said Bob Finley, chairman of the Waikiki Neighborhood Board.

Surprisingly though, Finley said, complaints throughout the course of the project have been few.

"They did a great job of handling consumer concerns," Finley said. "They even set up a 24-hour complaint hot line."

Most people have offered only enthusiastic responses about the project, said Rick Egged, president of the Waikiki Improvement Association.

"Everyone will be happy when it's over, because the construction has been a strain on the businesses in the area, but the consensus is that it will be well worth it," Egged said.

Though construction has not finished, people are already enjoying improvements in the region, he said.

"It's amazing. ... Even with the construction there is a tenfold increase in the number of people walking down the street," Egged said. "Yesterday there were people sitting on the sidewalk drinking coffee as construction went on around them."

Jim Poole, who represents the Lewers Street subdistrict on the Waikiki Neighborhood Board, said he has gotten mostly positive feedback about the project.

"My building, the Polynesian Plaza, is the closest residential building to the project, and I haven't gotten any negative feedback from my neighbors," he said.

"I think people were anticipating that construction would be a lot worse than it has been."