Royal Hawaiian costs top budget
Kamehameha Schools says it is investing an additional $31M on the center's overhaul
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The price tag on the redevelopment of the Royal Hawaiian Shopping Center in Waikiki has gone up 37 percent since it was conceived in 2004, bringing the total project cost to $115 million.
Kamehameha Schools said spending the additional $31 million on what is already its highest-earning real estate asset will help it secure better long-term returns.
It estimates the center's value will rise by 74 percent with the addition of better tenant spaces, improved access and an increased Hawaiian cultural presence, including six ethno-botanical gardens.
Roughly 26,000 square feet of new retail space, or about 9 percent of the original center's size, was added this year to the redevelopment project, which will encompass 310,000 square feet at completion.
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Kamehameha Schools is spending $31 million more than it originally planned for its massive overhaul of the Royal Hawaiian Shopping Center in Waikiki.
Costs for the redevelopment of Kamehameha's highest earning real estate asset have jumped 37 percent over the original budget of $84 million, bringing the total price tag to $115 million.
Susan Todani, Kamehameha's special projects director, said the higher costs are the result of an evaluation that determined additional investment was needed to gain higher returns from the renovation project, first envisioned in 2004.
"Kamehameha's increased investment in its highest-earning real estate asset has strengthened Royal Hawaiian Center beyond anything we envisioned in 2004," said "It was a conscious investment decision done with lots of layers of approval. We truly believe it will help create value because it has brought all kinds of tenant opportunities, design opportunities and community gathering places."
With the increased budget this year, the center's value will rise by 74 percent in 2009 with the addition of better tenant spaces, which have attracted major mainland anchors, she added. The center is in lease negotiations with 15 tenants that haven't been announced.
Roughly 26,000 square feet of new retail space, or about 9 percent of the original center size, was added this year to the project, which will encompass 310,000 square feet at completion.
Kamehameha created more leasable space by using hallways and closed corridors and moving out store fronts on the first floor.
The renovations, which are being managed by the Festival Cos., are expected to be completed by year's end. Interior construction for some of the 110 tenants will continue next year.
This additional $31 million investment will encompass the following:
» Design and construction of new retail and entertainment spaces for major anchor tenants that were not contemplated in the initial design and start of the project, such as the Waikiki Nei Showroom and Ultra Lounge.
» 26,000 square feet of new retail space, or about 9 percent of the original center size.
» Extensive improvements to create a Hawaiian cultural presence, including Hawaiian-themed graphics and art, six ethno-botanical gardens; native landscaping and a new cultural center at the Royal Grove.
» Improved pedestrian walkways with new access points, upgraded escalators and additional elevators.