What The Neighbors Are Saying

Adjoining businesses watch and wait as big plans take shape nearby

A tattoo shop, tiki bar and smoking accessories shop near Waikiki Beach Walk are a few of the businesses hanging on to the "old Waikiki" as the neighborhood around them undergoes redevelopment.

The Waikiki renaissance, as some have termed it, is transforming most of the neighborhood into a more upscale area, with higher-end shops and more luxury venues.

Translate that into higher rents, in excess of $30 a square foot per month in prime locations on central Kalakaua Avenue.

Greg Azur, owner of Hawaii's Natural High, which has been at 339 Saratoga Road for the last 25 years plying incense, Bob Marley T-shirts and water pipes, has seen all the changes -- but plans to stay put.

"A lot of our business is local," said Azur. "Whether these changes continue to bring local people to Waikiki remains to be seen, but I'm optimistic."

Outrigger's Beach Walk project, featuring new restaurants, shops and entertainment, is said to be targeting visitors while bringing locals back to the area.

Azur's lease on the ground floor of the two-story shopping complex known as Polynesian Plaza, which wraps around the corner of Kalakaua Avenue and Saratoga Road, is up next year.

He says he can afford the rent, probably a third of what is commanded in brand-new retail centers. But if he were to move just down the street, he would be easily priced out of the market.

The same goes for other tenants, including Arnold's Beach Bar & Grill, South Pacific Tattoo, the Caffe Latte restaurant upstairs and a number of small specialty boutiques.

The plaza sits on leasehold land belonging to a number of family trusts, while the building is owned by the Shidler Group. Given its growing value and location, the plaza could very well be sold one day.

"We're looking at all our options," said Larry Taff, managing partner of the Shidler Group. "Certainly, all the activity around us is good for the property. ... We're anxious to see how successful the (Beach Walk) project will be."

A new retail center at 2113 Kalakaua Ave., near Saratoga Road, is expected to open this spring, most likely with the higher lease rates.

Measuring 5,900 square feet, its design evokes the high-end look of Luxury Row at 2100 Kalakaua across the street.

The owner of the South Pacific Tattoo Co. at 345 Saratoga Road remembers when the center was home to the Nippon Rent A Car business, a surf shop, a used-clothing store and the exotic dancers club called the Lollipop Lounge.

When he was looking to set up his tattoo business 12 years ago, Thomas "Wondo" Wondoloski said, the street was away from the hubbub of Waikiki but strategically close to the Hale Koa Hotel, where he could draw military customers.

He recalls when the Niketown block was home to Kuhio Theater, Luxury Row was a souvenir market and Lewers Street had a fruit stand.

"There isn't much of the old Waikiki anymore," he said.

Yet he believes the overall redevelopment should bolster business. Wondo is optimistic he will reap the benefits of Beach Walk's redevelopment, once it is done. The irony is that it might also mean his rents will go up one day, which could force him to move out of the neighborhood.

Whereas the highest visitor foot traffic centered around the International Market Place in the past, the Beach Walk project is starting to draw traffic further Ewa.

"The center of gravity in Waikiki has shifted toward the Ala Moana side because of Beach Walk," said Tom Kenney, a retail broker at Chaney Brooks & Co. LLC. "Trump Tower and 2100 Kalakaua are on that side. It's finally beginning to attract traffic."

On either end of Waikiki, landlords along Kalakaua Avenue today can command at least $18 to $20 per square foot per month, according to Kenney.

Some old-time hotels on Beach Walk -- the 64-room Breakers Hotel, operating at Beach Walk since 1954, and 93-room Hawaiiana Hotel, on Beach Walk since 1955 -- have no plans to sell out or do anything other than business as usual.

Lisa Hookano-Holly, general manager of the Hawaiiana, said the new Beach Walk hotels are not potential competition, given that they are more high end.

The low-rise hotel actually got spillover business from the now-demolished Edgewater Hotel when regulars returned, seeking accommodations in the same neighborhood.

"The owner and I have too much of our lives invested into this place," she said. "It's an old-style Hawaiian hotel. We have a loyal following and loyal employees. It's a family."

However, when asked whether any price offered for the hotel could be high enough, she said, "Never say never."