Hawaii Kai WeePlay to close

The play center was losing money and couldn't afford a rent hike at Koko Marina

A popular children's play center in Koko Marina Center will close next month because it was unable to come to terms on a new lease with the Hawaii Kai mall's owners.

Negotiations between Brian and Mary Kalogirou Melzack, owners of WeePlay & Learn, and SKH Asset Advisors LLC, the shopping center's asset manager, broke down following the July closure of the mall's Bestsellers Books & Music store, also run by the couple.

The Melzacks, who moved to Hawaii after retiring from retail careers in Canada, say the business is closing because the landlord tripled their rent and refused to allow them to add a preschool to the play center.

SKH says the couple balked at prevailing market rates, and fell five months behind on rent.

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Until recently WeePlay & Learn, a play center for parents and their children, was planning to expand its Hawaii Kai location. Instead, after months of tense lease negotiations with representatives of Koko Marina Center, the small business will close next month.

Brian and Mary Kalogirou Melzack, owners of WeePlay & Learn, closed the doors to its companion business, a Bestsellers Books & Music outlet, in July. The couple said that they did not renew the lease for the bookstore that they had opened in 2004 because the business depended on tourists and the shopping center's direction had shifted more toward kamaaina. Also, they wanted to use the space to add a preschool to WeePlay & Learn's offerings.

However, the couple's decision to terminate the lease for the bookstore left them in a precarious position because both operations were conjoined, said Mary Melzack. WeePlay, whose lease contract had dissolved along with the bookstore's, was then put on a month-to-month contract by Koko Marina Center, she said.

"We got caught in a technicality," Mary said. "We should never have allowed the two businesses to operate under one lease."

Scott Hayashi -- asset manager for SKH Asset Advisors LLC, which represents mall owner Koko Marina Holdings -- said that while the mall agreed to allow WeePlay to continue operating in its location on a month-to-month basis, it was understood that other tenants would be considered for the space.

The landlord also expected that the couple, who were behind in their rent, would pay their outstanding debts, Hayashi said, but they are still in arrears.

When mall management found a new tenant, they offered WeePlay the opportunity to match the market rent the new tenant was willing to pay, but the Melzacks declined, he said.

"The tenant operated for more than four years at a rental rate which, at least from the landlord's perspective, was very favorable to WeePlay, especially in consideration of the rental rates on the market," Hayashi said.

WeePlay, like many start-up businesses, was losing money, Mary said. A glitch in accounting had put the business five months behind in rent, but after posting a few successful months, the Melzacks were trying to catch up on payments, she said.

"We were turning it around," Mary said, but added that the higher rent -- triple what they had been paying -- and the mall owners' refusal to let them start up a preschool connected with WeePlay forced them to close.

The mall owners declined the proposed preschool due to safety and operational concerns, Hayashi said.

"The landlord does not consider the center to be a safe or appropriate location for a preschool and was not in a position to provide the required outdoor playground," he said.

The Melzacks' tale is a cautionary one for other Hawaii small business owners. The Melzacks are hardly newcomers to retailing.

Brian is the former chief executive of the Toronto-based Classic Bookshops, a chain of 150 bookstores in Canada and the United States now owned by Indigo Books & Music Inc. Mary, a former leasing agent for the Hazelton Lanes shopping center in Toronto, is also a formidable entrepreneur; she admits that she lost sight of the bottom line while developing WeePlay.

"I did not do this to make a lot of money. I created this for my children and for all the other children on the island who needed a clean, educational, family-oriented place to play," said Mary, who has two adopted children, a biological child and another on the way.

Nora Bland, a broker with Sofos Realty, leasing agent for Koko Marina Center, said a franchisee of Florida-based Salad Creations is taking the Bestsellers space. The center is still negotiating to fill WeePlay's space, Bland said.

While the Melzacks are actively looking for a new location for WeePlay, relocating will be extremely expensive due to the hundreds of thousands of dollars that they spend on interior construction and marketing of their Koko Marina business. WeePlay's client list also was deeply rooted in East Oahu.

"We're still hoping that we'll find the right location to make this work," Mary said.

Parents and grandparents of children who have attended Wee Play say that it's unfortunate that the play center and shopping center could not come to terms.

"The programs that Mary conceived were very magical for children," said David McNeil, whose daughters Skye and India once attended the center.

"I'm sad for the next generation of parents," he said.

Sharon Eng, who attends the center with her granddaughter Samba Figueiredo, said Koko Marina Center and the nearby community will feel the loss of WeePlay, which served as an anchor tenant.

"There are hundreds of children in this community that are going to be displaced," she said.

Other Koko Marina retailers will likely feel the impact, too, Eng said.

"On the days that I take Samba, we go strolling up and down the center and I see all the new stores that have opened."