Tech firm
buys Tyco siteHoku Scientific Inc. will move
into an unused 38,000-square-foot
facility built by the telecom giant
Fuel-cell developer Hoku Scientific Inc. plans to move to a new Waianae headquarters that is five times the size of its current home and will allow the local start-up to begin commercialized production of its promising fuel-cell membranes.
The rapidly growing company, which is developing a hydrogen fuel-cell designed to supply clean and cheap energy to homes, said it has bought a never-used 38,000-square-foot undersea cable landing station and data center in Maili.
Hoku plans to retrofit the facility for pilot production and vacate its 7,000 square feet of space in Kalihi.
"We found the perfect facility and I am thrilled that we can bring a high-tech business to the Waianae coast to help boost its economy and image," Hoku's operations manager Michael Burke said.
In the process, Hoku has picked up what surely must be Oahu's most discounted piece of real estate.
The facility was completed two years ago by Tyco Telecommunications at a whopping price tag of $75 million and was intended as a key link in the company's globe-girdling undersea fiber-optic network.
But the bursting of the telecom bubble scuttled Tyco's plans to lay an expensive trans-Pacific cable that would have plugged into the Maili station.
The property has languished on the market ever since, even after Tyco dropped the sale price to $18 million and then $5 million early this year.
Hoku would not disclose a purchase price but the company got a "discount" on the $5 million sale price, said Pete Alpeter, the Chaney Brooks & Co. sales agent who brokered the deal. The purchase is in escrow and is expected to close in late September.
Hoku Scientific was formed by two Big Island natives, President and CEO Dustin Shindo and Chief Technology Officer Kaleo Taft. The company has raked in several million dollars in venture capital from investors excited by the potential of its technology and by its $6 million development agreement with Sanyo of Japan.
Hoku has developed a fuel-cell membrane that it says is less expensive to manufacture, burns cleaner and provides more energy than standard membranes. Those membranes are the key ingredient in hydrogen fuel cells that Sanyo wants to market for consumer energy needs in Japan, ranging from laptops to air-conditioners and potentially even automobiles.
The Maili move seems to diminish chances that Hoku would be forced to follow other successful Hawaii technology start-ups that have moved outside the state to be closer to funding sources.
"Having the facilities necessary to keep the company in Hawaii is a must. Securing and moving into the Maili facility is almost a requirement to keep Hoku Scientific in Hawaii," Burke said.
Burke said Hoku will spend an estimated $2 million to $3 million refitting the Maili facility, and hopes to move in around the first of the year.
Shindo, who also founded the Mehana Brewing Co., said earlier this year that it was imperative for Hoku to get into pilot production quickly, given the fast-moving nature of fuel-cell technology. The Maili site will not, however, serve as a full-scale manufacturing plant, Burke said.
"We probably would not be able to support a full-blown manufacturing process in Hawaii, but we would like to keep our pilot production, R&D and headquarters here," he said.
Hoku has grown rapidly. At the beginning of the year it had about a dozen employees but now has a staff of 20, many with advanced degrees. It plans to expand its staff to around 30 by year's end and Shindo says he hopes to hire from within the Waianae community.
"As we grow, we plan to hire residents from the Waianae area for various positions," he said.
The Maili site is in a district zoned for residential use but Tyco obtained a zoning variance allowing it to operate as a utility. Alpeter said Hoku is applying for the same variance.
Hoku officials would not comment on whether failure to secure the variance could scuttle the deal.
Hoku Scientific Inc.
www.hokuscientific.com
