Aloha Tower
loses $9M

The bottom line worsens
for the bankrupt owner
of the popular location

By Tim Ruel

The bankrupt owner of the Aloha Tower Marketplace lost more than $9 million last year, in a significant worsening of its bottom line, according to a financial statement filed yesterday in U.S. Bankruptcy Court.

Previously, the annual loss for marketplace owner Aloha Tower LP was $1.6 million, the firm has said.

Aloha Tower LP filed for Chapter 11 reorganization bankruptcy Jan. 15, 2002, following a dispute with its landlord, the state Aloha Tower Development Corp.

The $9 million loss was recorded between Jan. 15, 2002, and the end of the year.

Aloha Tower's owner had total revenue of $6.1 million, including $1.3 million in parking fees and $3.7 million in rental income from marketplace tenants.

But revenues were outstripped by operating costs, which totaled $6.9 million for the period. Plus, Aloha Tower's owner spent nearly $8 million on interest payments last year.

In 1997, an affiliate of Aloha Tower LP bought the discounted $60 million mortgage to the Aloha Tower Marketplace from Mitsui Trust & Banking Co. The marketplace, a 166,000-square-foot leasehold retail complex, has a market value of $32.3 million, though its development cost in 1994 reached $100 million.

Aloha Tower LP and its affiliate are controlled by limited partner Trinity Investment Trust LLC. Trinity Investment representative Jon Miho could not be reached for comment yesterday.

Aloha Tower's owner sued the state for $10 million shortly before it filed bankruptcy, alleging that the Aloha Tower Development Corp. hurt the marketplace financially by charging excessive rent and taking away parking stalls.

The marketplace's annual rent is $1 million, though the state alleges Aloha Tower stopped paying rent in November 2001.

In court filings, Aloha Tower said it has been paying into a rental trust fund.

Aloha Tower's case was dealt a setback in September 2002, when a federal judge ruled that the state was immune to the suit, though Aloha Tower is appealing.

Meanwhile, the state was dealt a setback of its own last month, when a state judge ruled that nearby Irwin Park must remain a park, thwarting the state's proposal to build a two-level parking garage there.

Aloha Tower Marketplace

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