Ala Moana owner
to buy Ward

General Growth Properties bids
to acquire commercial land
including Ward Entertainment Center

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By Rick Daysog
rdaysog@starbulletin.com

The owner of Ala Moana Center has reached a tentative agreement to acquire Victoria Ward Ltd. and its 65 acres of commercial land in Kakaako, in a deal that would strengthen the company's already dominant retail presence in Hawaii.

Chicago-based General Growth Properties Inc. has outbid locally based Alexander & Baldwin Inc., for the popular retail and entertainment complex, according to several people familiar with the deal.

The details have not yet been finalized and the proposed price was not available. But the acquisition, which includes cash and debt, will likely be valued at around $250 million.

Mitch D'Olier, Victoria Ward's chief executive officer, declined comment, and General Growth officials were not available. The two sides were expected to hold a news conference this afternoon.

The tentative deal comes after Victoria Ward, a major competitor of Ala Moana Center, announced plans for a $200 million expansion of its retail properties.

Last November, Seattle-based Nordstrom Inc. signed a letter of intent for a 150,000-square-foot department store to complement the $40 million Ward Entertainment Center, which was completed last year.

The proposed deal, which is being brokered by the investment banking firm of Credit Suisse First Boston, would be the largest retail transaction in Hawaii since General Growth's $810 million purchase of Ala Moana Center in 1999.

For General Growth the purchase would shore up the company's sizable assets in Hawaii. In addition to Ala Moana Center, General Growth owns two office towers next to Ala Moana Center as well as the 504,000-square-foot Prince Kuhio Plaza in Hilo.

Ala Moana Center is the state's largest shopping center with 1.2 million square feet of space.

A recent prospectus issued by General Growth listed Ala Moana Center's net operating income at $76.2 million for the 12 months ending June 30, 2001.

However, its tenants' sales to Japanese and mainland tourists, which represented more than half the center's overall business in recent years, declined after the Sept. 11 terrorist attacks.

The acquisition would also give General Growth a major entertainment retail component that has been largely lacking at Ala Moana Center.

The Ward Entertainment Center includes Consolidated Theatres' 16-screen movie complex and Dave & Buster's, the popular arcade and restaurant.

Founded in 1930, privately held Victoria Ward is one of the largest landowners in Kakaako.

The company, with 120 retail tenants on 400,000 square feet of retail space, listed its annual sales last year at around $30 million.

Key tenants include the Sports Authority, Pier 1 Imports, Nordstrom Rack and Borders Books Music & Cafe.