Kaneohe Ranch has been buying back leases and buildings on its 46 acres of land in central Kailua. Among its properties is the Kailua Shops.

A new Kailua

Kaneohe Ranch wants
to remake its properties,
and increase business

Developer seeks comments

By Russ Lynch

Mitch D'Olier spent most of his last year as head of Victoria Ward Ltd. selling the business, and putting himself out of a job in the process.

In a new job responsible for almost all business property in Kailua, he would rather be remembered for what he did in the first few years at Ward.

He began by getting to know the community and what residents and businesses wanted it to become, D'Olier said. He believes that worked well enough for him to build a business effective enough to be sold last year for $250 million.

Now, as president and chief executive of Kaneohe Ranch Co. and the Harold K.L. Castle Foundation, D'Olier is not looking to sell. But he is looking to increase cash flow for the Castle family trusts.

The way to do that, he said, is to to follow the same formula he did at Ward, by improving Kaulua through bringing in new businesses and making life better for businesses and residents are already there.

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Since taking the job last summer, he has said many times he wants Kailua to be the best little beach town in the world, a plan that runs smack into the beliefs of some residents think it already -- without changing it.

D'Olier, an attorney who used to advise Hawaiian Airlines before briefly serving as its president, got the top operating job at Victoria Ward in 1993.

That made him responsible for 65 acres of prime Kakaako land. Now he has responsibility for 50 parcels of contiguous commercial property in Kailua, totaling 46 acres.

"It's the Waimanalo side of the town," D'Olier said, host to retailers such as Macy's and Foodland and many smaller businesses.

Though his task is to maximize income, he said he wants to do it in a way that keeps Kailua as a community that is also attractive to visitors from other communities.

First, he wants input, particularly from the housewives of Kailua. So far, he said, he's hearing they want a bigger variety of merchandise and more places to buy it, so that eventually they won't have to shop on the other side of the Pali.

"One of the things I am trying to figure out is what do the ladies of Kailua want in the way of merchandise in downtown Kailua," D'Olier said. "They don't want to go over the Pali to do their shopping."

To that end, Macy's has signed a new 10-year lease and will stay in its two-story building in the heart of the town.

D'Olier said he expects to keep on with a project his predecessor started, buying back leases and the buildings other owners had placed on Castle land. That policy, in place for about five years before D'Olier came aboard, has brought a new look to Kailua, new buildings, new shops and new businesses.

In the past five years, Kaneohe Ranch has spent more than $8 million purchasing leases and buildings.

Foodland Super Market Ltd. moved into a Kaneohe Ranch-owned property in Kailua to end a four-year absence from the town.

And starting in 2009, Kaneohe Ranch will be able to take back a bunch of small apartments along Kailua Road, past the town toward the beach. D'Olier envisions rebuilding with more attractive rental housing, owned and operated by Kaneohe Ranch on Castle land.

But what is Kailua and what should it become?

Those are the questions D'Olier says he wants to answer before creating a master plan for Kaneohe Ranch's property. What kind of buildings should be erected on land as it becomes available?

"How high is up and how much is too much?" he said. "This is not urban Honolulu. This is the country."

Probably, Kailua should be celebrated as a beach community, but it also needs that "we're on the other side of the Pali" feeling and, if possible, more of a sense of "Hawaiianness," D'Olier said.

But it has to make business sense.

"We want to continue to augment the improvements in the real estate, but we will only do it when it builds cash flow. I'm a cash-flow guy," D'Olier said.

There are many ways to do that, he said. At Victoria Ward he worked out a partnership deal with Glenn Kaya, long-term lessee of property on Ward Avenue. The result was a new Sports Authority store, with benefits for both land owner and the master lessee.

In Kailua, Kaneohe Ranch worked with Foodland Super Market Ltd. to bring Foodland back to Kailua as the anchor of a new center that also includes a Big City Diner and smaller businesses such as a Quizno's deli, a Dunkin' Donuts and a surf-wear store.

The property is owned by Kaneohe Ranch.

"It's been a good partnership. They certainly have been understanding of our needs," said Jenai Wall, president and CEO of Foodland Super Market Ltd.

Business in the store has been great as the community welcomed Foodland back after an absence of nearly four years, she said.

Also new in Kailua is the Kailua Shops on Hahani Street alongside Macy's, anchored at one end by Teddy's Bigger Burgers and at the Kailua Road end by a Starbuck's.

Near the original Kailua Shopping Center on the makai side of the main strip through town, there is the Malama Building, sporting a new clock tower. Over recent years Kaneohe Ranch and Castle acquired that building and others, including the old shopping center and a more recent restaurant strip on Hekili street.

D'Olier now is figuring a 10-year plan. He has received close to 70 e-mails and letters since he started asking people in the community to help him determine the future for the Kaneohe Ranch properties.

For example, he discovered that "there are many more restaurants in Kailua than I thought, but they are asking for more," he said.

Victoria Ward Ltd. veteran Mitch D'Olier is leading Kaneohe Ranch's redevelopment effort.

He would like to see some local conflicts settled. There is a thriving bed-and-breakfast business at Kailua beach but a lot of it is unlicensed and in violation of zoning laws. Some residents object to businesses operating in a purely residential area.

But if everyone comes to consensus, maybe with some kind of amnesty, reputable bed-and-breakfast businesses could bring quality visitors to Kailua, people who would spend money with local merchants, D'Olier said.

There probably should also be a retirement community in Kailua, D'Olier said. As residents age they would like to move out of family homes, perhaps, but don't want to leave Kailua, he said.

"What is Kailua? It's an aggregation of its assets. It's a real place, with people that love it and take care of it. There's a lot of community volunteers. Our Fourth of July parade is the nothing less than amazing," he said. "There are 20,000 households in Kailua and 40,000-50,000 people. The average household income is $105,000 and that probably ought to be $130,000 if you include Kaneohe and other parts of Windward Oahu."

The next big change is to get overhead utility wires that run through the center of the business area down under the ground. City approvals are in place and contracts have been issued.

Some people are leery of wholesale change.

That is certainly true, said Don Bremner, a Kailua resident, former city planner, former chief executive of the Waikiki Improvement Association, former chairman and still a member of the Kailua Urban Design Task Force.

"For years the Outdoor Circle has held the town party in Kailua. We've taken comments there of what people would like to see happen to Kailua," Bremner said.

A lot of the responses were along the lines of "don't fool with it, don't change it, don't California-ize it," Bremner said.

D'Olier has "made overtures to get involved in the community, which is good, but we really haven't heard anything new yet," he said. "People get edgy about those kinds of things."

There are those who hear D'Olier talk about making Kailua the best beach community there is and they say: "It already is," Bremner said.

Kaneohe Ranch is on the right track in listening to people first, he said.

"We're at a pretty happy stage at the moment," Bremner said.

Kathy Bryant-Hunter, who chairs the Kailua Neighborhood Board, said there are always worries when one entity owns so much of a community.

"I think there's always been kind of a love-hate relationship because they own so much property," she said. "When you're dealing with such a huge land owner you like to have a working relationship but you're kind of at their mercy."

Bryant-Hunter said the ranch could play more of a role in the protection and enhancement of wildlife such as the wetlands along Hamakua Drive, but on the whole it is working well with the community.

"I think people who live here live in that balance of not wanting too many more people. Our infrastructure is pretty well maxed out," she said.

Pohai Ryan, executive director of the Kailua Chamber of Commerce, said Kaneohe Ranch has been very responsible in its approach to changes in Kailua. The style changes and overall improvement of the old Kailua Shopping Center provide an example, she said.

Ryan said she is glad that the "beach town" concept no longer sounds like "Long Beach planted in the middle of the Pacific" and that Kaneohe Ranch seems dedicated to creating some Hawaiian feeling in the town.

Another Kaneohe Ranch tenant, Down to Earth Natural Foods, said Kailua has some really positive aspects for the right kind of business. "It is a health-conscious community, a family community," said Cliff Hillear, store manager.

"Kailua people are very supportive of their local businesses, but they're very discerning," Hillear said. "Once they work out that you're OK, they'll be with you."


Your voice

Kaneohe Ranch, the for-profit arm of the Castle family trusts, owns much of the commercial property in Kailua. The company is seeking comments about what residents want to see in the town:

On the Web:

E-mail: Mitch D'Olier at

E-mail to Business Editor


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