Target Stores of Minneapolis has set its sights on the seven-acre site now leased to Don Quijote in Kailua.

While talks have been preliminary, the Minneapolis-based retailer is in discussions with the Japan retailer about the site.

“;Target is interested in bringing a third Target to Oahu, specifically to the Don Quijote site in Kailua,”; said Target spokeswoman Anna Anderson in an e-mail to the Star-Bulletin. “;However, before committing to any location, we work with a variety of partners to ensure we can secure the appropriate approvals to the area. At this time, it would be premature to confirm any store or timing specifics.”;

Mitch D'Olier, president of Kaneohe Ranch Co., which manages the land, said Don Quijote's master ground lease is good until 2022.

“;Don Quijote has been a good tenant and a good partner, and I have no ability to terminate their lease,”; D'Olier said.

However, D'Olier said Target approached Kaneohe Ranch a few weeks ago to discuss the possibility of taking over Don Quijote's lease.

The deal would first have to be worked out between Don Quijote and Target, he said, and then approved by Kaneohe Ranch.

“;We know we have a stewardship responsibility for what's right in downtown Kailua for Kailua residents, and we take that seriously,”; D'Olier said. “;We think Target understands that.”;

Target in March opened its first two stores on Oahu—in Salt Lake and Kapolei—after years of planning and anticipation. Target's Kona store opened in July.

Don Quijote's advertising department did not return phone calls from the Star-Bulletin.

Tokyo-based Don Quijote Co. Ltd. bought Hawaii's four Daiei stores and reopened the stores under its name in 2006.

Don Quijote, nicknamed Donki in Japan, has three other stores on Oahu, in Honolulu, Pearl City and Waipahu.

Recently, the retailer hired CB Richard Ellis to scope out additional store sites—from Mililani to Hawaii Kai and Kaneohe.

Windward residents polled in Kailua town yesterday were hesitant about whether Target fitted in the small community of mostly boutiques and independently owned shops.

Steve Ristow and Bobbie Conlan, both of Lanikai, said they didn't want Kailua to lose its character and local flavor.

“;It's just one more step in making Kailua more like California,”; Conlan said.

They miss Daiei, but would surely miss Don Quijote if it were to close down.

“;Where else can you find a whole aisle of rice cookers?”; said Ristow, who also said he would welcome Liberty House back.

AnnMarie Fisher of Kaneohe was not sure if Target would fit in Kailua town.

Target would be a better choice than Wal-Mart or Kmart, she said, with a better reputation as a corporate neighbor, but is still a national chain.

“;It's a big-box store,”; she said. “;In that sense, it really changes the character of Kailua, which has always been local with a strong dedication to keeping it local.”;

She also wondered whether local merchants would be impacted by competition from Target.

“;I would miss Don Quijote,”; she said. “;It's one of those places you can go and everything's there, including local goods. It's unique to Hawaii.”;

Don Quijote carries local produce, including papayas and avocados that are often out front, along with seafood, groceries (including Asian groceries), souvenirs, some apparel, beauty goods, fishing gear, electronics, cookware and Japanese merchandise.

The Don Quijote master lease includes a small strip of shops including Ba Le Sandwich Shop, Yum Yum Express and Twogood Kayaks.

Kailua is already home to Safeway, Foodland, Times and Down to Earth, as well as Don Quijote, all within a short walk from one another, while Whole Foods Market is expected to open in fall 2011.