CRAIG T. KOJIMA / CKOJIMA@STARBULLETIN.COM
A composite of two photos taken this week shows the magnitude of the Wal-Mart construction site on Keeaumoku Street.
Wal-Mart set to begin
signing tenants for
Keeaumoku siteA company spokeswoman says
construction is about 50 percent
complete for the complex
Officials from Wal-Mart Stores Inc. are in negotiations with several retailers and are expected to sign leases to fill six business spaces adjacent to the double-decker Wal-Mart and Sam's Club stores on Keeaumoku Street.
A combination of local and national businesses are expected to sign leases in the next month or two, paying upwards of $8 a square foot to secure space in The Shops on Keeaumoku at Wal-Mart and Sam's Club, said Jon-Eric Greene, leasing agent for Wal-Mart.
The retail giant will be centered in the heart of a dense urban community of residents and businesses, but its nearest neighbors will be the retail stores that locate in the adjacent 4,000-square-foot shopping complex.
"We won't reveal the retailers until they sign the leases, but they'll be a mix of national and local businesses," Greene said. "Customers will recognize some big name brands."
Wal-Mart considered about 50 applicants before narrowing the tenant list to a few specialty retail and food-service businesses, said Cynthia Lin, Wal-Mart spokeswoman.
Projected retail traffic for the area is so large that, even though they are charging higher rents, "Wal-Mart will be able to pick and choose whom they want to be there," said Stephany Sofos, retail marketing analyst.
Although Wal-Mart is still finalizing its tenant list, construction is about 50 percent complete on the shops as well as the 315,000-square-foot structure that will house a Wal-Mart and a Sam's Club. Wal-Mart's first development in urban Honolulu will take up 8.5 acres of the 10.5-acre property bordered by Keeaumoku, Rycroft, Sheridan and Makaloa streets. A grand opening is projected for late summer or early fall, Lin said.
The store is expected to create a huge marketplace with some customers spilling over into its adjacent shopping complex, putting rents in the district at a premium. Rent on the 500 to 750 square-foot retail spaces located in The Shops on Keeaumoku will be at a premium, Greene said.
Other rentals in the neighborhood retail for around $2.50 to $3.50 per square foot, however shop spaces anchored by a Wal-Mart typically will fetch 30 to 50 percent higher rents than the highest market rates, Greene said.
Some small businesses might choose to pay premium rents in exchange for the opportunity to benefit from a higher-volume of customer traffic, Sofos said.
"Charging higher rents is a very ambitious undertaking on the part of Wal-Mart," Sofos said. "However, the smaller guys will piggyback off of this captured market."
Wal-Mart has not released a list of tenants for its shopping center project, but Sofos anticipates the slots will be filled by local-style retailers, who offer specialty merchandise not stocked by Wal-Mart or fast-food items like ice cream, bentos or pretzels.
"I'm sure most of the vendors will be local businesses," she said. "One of the things about Wal-Mart and Costco is that they are very sensitive about the areas that they go into. They try to bring in local vendors to calm everything."
The retail giant began eyeing Keeaumoku as another potential location in the 1990s. Developers have kicked around proposals for the vacant Keeaumoku site since the late 1980s.
Haseko Hawaii Inc. once planned a $400 million retail, luxury condominium and office project. The collapse of the state's economy stopped the project.
Once Wal-Mart revived the project, it was met with opposition from some of the 537,554 plus residents who live within a 10-mile radius of the area as well as some of the smaller businesses whose owners worried about competition.
The project was also criticized for its potential to create additional traffic concerns in the dense urban area.
Wal-Mart has widened and realigned streets, installed two traffic signals and modified sidewalks and curbs to accommodate pedestrians, taxi cabs and mass transit, Lin said.
"We've done our best to address all the concerns," Lin said. "We believe the store is going to have a positive impact on the community."
The opening of the new store will generate 1,100 jobs and should create a shopping district where consumers can get quality merchandise for low prices, she said.
The Bentonville, Ark.-based company employs 3,000 people in Hawaii at Wal-Mart stores in Mililani and Kunia, Kailua-Kona, Hilo and Lihue, and a Sam's Club in Pearl City.
