GEORGE F. LEE / GLEE@STARBULLETIN.COM The sale of Aloha Tower Marketplace ends Aloha Tower LP's more than 3-year bankruptcy. Above, a statue of a hula dancer and an archway greeted visitors to the Aloha Tower Marketplace yesterday.

Aloha Tower
Marketplace bought
out of bankruptcy

The shopping complex is sold for
$25 million to a mainland firm

Aloha Tower Marketplace has been purchased out of bankruptcy for $25 million by AHI Aloha Associates, a newly formed Delaware corporation backed by New York-based Apollo Real Estate Advisors LP.

The sale by Aloha Tower LP ends the partnership's more than 3-year bankruptcy and provides for payment of 53 cents on the dollar to unsecured creditors.

The payments were made to 62 creditors holding about $380,000 in claims. The creditors include Akal Security, Enoa Tours and Hendrix Miyasaki Shin Advertising.

Chuck Choi, bankruptcy attorney for Aloha Tower LP, said distributions to the unsecured creditors were mailed Monday.

Other payouts include about $200,000 to the state's Aloha Tower Development Corp., which oversees Aloha Tower, and $12,500 to the state Department of Transportation.

AHI Aloha Associates is a successor to AHI Aloha LP, which at one time included Trinity Investment Trust LLC. Trinity is not part of the new AHI Aloha Associates.

Apollo Real Estate Advisors is described by financial industry Web site Hoover's as having a vulture investor reputation from specializing in distressed assets such as floundering companies, junk bonds and real estate. It was established in 1993 by 13 former executives of Drexel Burnham Lambert following that company's collapse.

Apollo's own Web site describes the company as "one of the most active and prominent opportunistic real estate investors in the U.S. and internationally."

MMI Realty Services Inc. will continue to manage the Honolulu waterfront restaurant and retail complex, which was built for $100 million in 1994.

"It will be business as usual as far as our management role and we've kicked into summer real strong," General Manager Floyd Williamson said.

The overhanging bankruptcy appears to have had little to no visible impact to Aloha Tower's customers. The vibrant nightlife at restaurant and entertainment venues such as Kapono's, Don Ho's Island Grill and Gordon Biersch Brewery Restaurant lure mostly local people through regular promotions with local media outlets.

The marketplace also has become aggressive in its marketing and event promotion.

"We had our Mardi Gras celebration earlier this year," marketing manager Melissa Chang said.

It also marked St. Patrick's Day, long the sole territory of downtown Irish pubs.

"That was huge. We had a lot of spillover from downtown," she said.

Cinco de Mayo and Independence Day fireworks on July 3 also were big marketplace events.

Aloha Tower Marketplace's occupancy rate is near 100 percent, Williamson said.

New tenants have been streaming in, including Golf Gadgets, Sunglass King, Himawari and Crazy Fish, a store "with a lot of girlie dresses," Chang said.

"I know there's a perception out there that our stores are geared mostly toward tourists, but there's a lot of island fashions, too," she said.

However, Chang confessed to an addiction to one merchant's line of Skinny Minnie shirts from a California company.

"I must have five or six shirts," she laughed.

Other tenants are on the way, including Florida-based furniture and accessories store Urban Rejuvenation. Its Web site indicates it will open this summer. Another store, Sweetie Gift Shop, will sell European porcelain.

The marketplace suffered, along with everyone else, after the Sept. 11 terrorist attacks. However, some charter tenants, such as Hooters, have "always been doing well," Williamson said.

"Most of the customers are military-based customers, so even though the market went down for tourism (after 9/11) Hooters was always as strong as ever."

"We're primarily a restaurant-driven property," Wil-liamson added. "That's our core, so customers go to the restaurants and then to go the retailers." It also gets a healthy influx of Japanese and mainland visitors, but the "mainstay is the standard downtown business people, for lunches and pau-hana."

One of the marketplace's drawbacks continues to be limited up-front parking, with the majority of parking a relatively long walk away.

"It is what it is. ... It continues to be a challenge for us," Williamson said.

The task, he said, is to educate the public about the available parking, especially after business hours, across Ala Moana. Topa Financial Center, Harbor Square, Harbor Court and a number of the downtown office buildings all have spaces.

The alternate parking sites do not offer validation for the marketplace, but Williamson said that at $4 or $5, it's not a bad deal "given that we're in the downtown business core. It's not as bad as Waikiki."