Outrigger plan
targets properties

The city could force the owners of
5 Waikiki parcels to sell

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By Gordon Y.K. Pang
gpang@starbulletin.com

Five Waikiki property owners would be forced to sell their interests to make way for Outrigger Enterprises' $300 million Waikiki Beach Walk project under a resolution before the City Council.

The five properties represent about 10 percent of the eight-acre project, said Eric Masutomi, Outrigger's director of planning. Outrigger has worked out purchase prices with about six other area property owners over the last six years, he said.

"We've been trying to work with them for the past few years in terms of acquiring the interests and, for various reasons, they've chosen not to sell," Masutomi said.

The ambitious Outrigger project encompasses the Beach Walk section of Waikiki bounded by Saratoga Road, Kalakaua Avenue, Lewers Street and Kalia Road.

Outrigger remains in discussions with all five, Masutomi said, and the hotel chain is hopeful it won't need to rely on the city's eminent domain powers.

Condemnation proceedings would require the landowners to sell their interests at fair market value, to be determined by an independent appraiser or at a trial.

The properties would then be sold to Outrigger, which would reimburse the city for all the costs.

Tax records show the combined assessed value for the five parcels at about $32 million.

Outrigger actually has partial fee interest in three of the five properties. It also has lease or business interests in all five of them, including hotels on four of them.

Mayor Jeremy Harris' administration transmitted the resolution on behalf of Outrigger. Harris has voiced support for the Outrigger project and other Waikiki redevelopment.

Administration officials did not respond to queries about the resolution yesterday. But according to the resolution, "the acquisition and redevelopment of the parcels are necessary to advance public purposes and uses set forth in the General Plan."

Waikiki Councilman Duke Bainum said he has mixed feelings about the condemnations.

"Clearly we're very interested in developing Waikiki and it's a great project," Bainum said, noting that it would bring long-term and short-term jobs.

"Yet eminent domain is something you use with great care so I need to know a lot more, and hear a lot more testimony, before I make a final decision."

The city, Masutomi said, is not giving special treatment to Outrigger because the project benefits the entire island.

"I'd like to think that actually the city is acquiring these for the City and County of Honolulu's best interest," Masutomi said, acknowledging that "obviously the perception can be easily viewed otherwise."

But over the last decade, he said, redevelopment of the Lewers area has been one of the city's top priorities for Waikiki.

The city sees the Lewers area as a good candidate for sprucing up because it is largely under one owner and has the size and location "where redevelopment could have a significant, catalytic effect on the overall economic revitalization in Waikiki," Masutomi said.

"Somebody once said that it seems like the city is doing Outrigger's business," Masutomi said. "My response was if you sit in our seats and looked at the risks involved, I think many of us feel we're doing the city's business."

The resolution states that the project would lead to improved public facilities and economic benefits.

Efforts to locate representatives for the five landowners yesterday were unsuccessful.

The five properties are:

>> A 27,056-square-feet portion of 227 Lewers where Outrigger's Ohana Reef Towers Hotel sits. Outrigger owns two-thirds interest in the parcel. The Andrade Trust owns the remaining one-third.

>> A 6,399-square-foot parcel of 240 Lewers which is now part of where the Ohana Coral Seas Hotel stands. It is owned by the Melinda Allison Trust. Outrigger owns the other property.

>> A 3,546-square-foot parcel at 2194 Helumoa/226 Lewers that is the site of a Carl's Jr.-Lewers restaurant. It is owned by Jacqueline L. Johnson and others. The recorded lessee is TP Acquisitions, but Masutomi said Outrigger also has a lease interest.

>>A 3,547-square-foot parcel at 2188 and 2190 Helumoa that constitutes one-sixth of the land under Outrigger's Ohana Waikiki Village. The parcel is owned by the Clarice M. Garrison Trust.

>>A 9,954-square-foot parcel on 225 Saratoga, which houses half of the Ohana Reef Lanai Hotel and is owned by the Jabron Mango Co. The rest of the hotel sits on property owned in fee by Outrigger.