Waikiki project proposal
keeps running into

After running into community opposition on one development proposal, the owners of a vacant Waikiki land parcel have put forward a second plan that critics say is worse than the first.

K3 Owners LLC is considering developing a commercial tower featuring a movie theater multiplex as an alternative to a proposed condominium or time-share complex.

But both would be high-rise projects, and community opposition has been based on concerns over blocked views.

Keith Kurahashi, a development consultant who represents K3 Owners, said the latest proposal would house several theaters and eight to 10 stories of parking on the lower floors of the project, which would be at 2121 Kuhio Ave.

The upper floors of the project, which would approach the 300-foot height limit under existing zoning, would likely feature a mix of dining facilities, retail and commercial space, he said.

But residents who oppose the addition of another high-rise to the area say the latest plan is merely a bluff by the developer, who they say is trying to make the original condo/time-share proposal more palatable to people in the area by dangling the threat of a commercial development that could impact traffic and property values.

"I don't doubt that for a second," said state Rep. Galen Fox (R, Waikiki-Ala Moana). "Is there some huge demand for office space in Waikiki? The demand is all for condos or time-shares. They want a piece of that action."

K3 Owners issued a statement stressing that it indeed hopes to stick to the original proposal for condo or time-share units.

That project also would be close to the maximum allowed height of 300 feet and would feature 27 floors of either condominiums or time-share units.

Kurahashi said K3 Owners plans to submit an application to the City Council "soon" for a zoning change from the current Resort Commercial to Resort Mixed-Use to facilitate the residential project.

However, he said K3 Owners needed the commercial tower proposal as a fall-back.

"If we're not able to get the rezoning, we have to look at potential commercial uses," Kurahashi said.

The K3 Owners statement said that if it is "forced to work within commercial confines, the theater/entertainment idea is only one of many that could be pursued," but called it a "very attractive" one.

Local residents are not so sure. Bad blood has existed between the two sides ever since local developer Honu Group, a partner in K3 Owners, developed the Niketown outlet and the 2100 Kalakaua upscale shopping complex on adjacent parcels.

Waikiki Neighborhood Board members say Honu Group misled them into thinking those developments would feature establishments that catered more to locals.

"And what did we get? Niketown. A big box that has nothing to do with Hawaii," says Fox.

Board member Walter Flood said Honu Group subsequently promised that 2121 Kuhio would be developed as a low-rise retail/entertainment spot geared for local residents that echoed the laid-back flavor of Hula's Bar and Lei Stand, which once dominated the site.

But earlier this year, K3 Owners unveiled plans for the condo/time-share project, prompting protests from residents of nearby buildings that their views would be impaired.

"Obviously we would like no high-rise there at all," said Flood. "We'd like the developers to stick with what they promised."

However, Kurahashi said K3 Owners had decided "the market had changed" and that the idea for a low-rise retail development for locals at 2121 Kuhio was no longer feasible.

"Retail on its own is not that lucrative in Waikiki," he said.

But if the theater plan goes ahead, K3 Owners would be attempting to succeed where others have failed. Waikiki once had several movie theaters but all have gone out of business.

Despite that history, Kurahashi said K3 Owners believes a multiplex of between eight and 12 screens would be able to offer more variety and thus fare better than the smaller theater properties seen in Waikiki in the past.

"We believe there is a market for theaters in tourist areas," Kurahashi said. "Just look at the Ward Theaters. A lot of the people going out there are tourists."

Kurahashi said K3 Owners had adjusted the orientation of the proposed condo/time-share project so that its broadest side did not face adjacent buildings, thereby limiting the potential impact on views. He added that the "views of property owners are not protected" under the law.

But Flood says he and other residents are seething over what they perceive as strong-arm tactics by the developer.

"We know there is a minimum chance that any office space would be rented out but they've dropped that in there as a way of saying 'if you don't approve our other proposal, we're going to drop in this monstrosity,'" he said.

Mike Hamasu, research director with property management firm Colliers Monroe Friedlander, also questioned the wisdom of the idea.

"The recent history of theaters in Waikiki has got to be a concern for any developer," he said.

And with Waikiki office space suffering 18 percent vacancy, that bodes ill for the prospect of recouping any investment through rental incomes.

"Steel prices are up, the cost of labor and construction is up overall. I don't think rents there are anywhere near where they'll sustain significant office space," he said.

Flood said area residents were poised to come out in force if and when K3 Owners' application for a zoning change related to the residential proposal comes before the City Council.


E-mail to Business Editor


Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
© 2004 Honolulu Star-Bulletin --