COURTESY PM REALTY GROUP This rendering shows the new Safeway store planned for Oahu, which will become the chain's 13th on the island.

Kapahulu Safeway center to break ground

A longtime strip mall will be replaced with an upscale shopping center

Safeway Inc. is planning to celebrate the groundbreaking next month of its new store in Kapahulu.

What has long been a strip mall, home to a handful of small restaurants and shops at 870 Kapahulu Ave., is expected to undergo an upscale transformation. The name of the new center will be "The Avenue Shops at Safeway Center on Kapahulu."

Wendell Brooks III of PM Realty Group, who brokered the sale of the 4.5-acre site to Safeway, said site work will begin on Aug. 5 following the groundbreaking.

"There are signs of upgrading and changes," Brooks said. "Kapahulu is such a great avenue, with so many things to offer, and a unique character. We hope it never loses that."

In addition to the Kapahulu Safeway -- the supermarket chain's 13th on Oahu -- the center will offer close to 17,000 square feet of new retail space.

Tenants for roughly half of the new spaces are close to signing leases, according to PM Realty Group broker Kyle Arsiga. Interest was very strong, he said, and will result in a mix of both local businesses and new-to-Hawaii shops.

Rents at "The Avenue Shops" range from $8 to $12 per square foot per month, according to PM Realty Group, setting a new bar for the neighborhood.

Renderings for the new Safeway depict a sleek, contemporary supermarket with rooftop parking, outdoor seating and "art deco" touches.

The new supermarket will measure more than 60,000 square feet, about two times larger than most Safeway stores on Oahu, with rooftop parking as well as surface parking.

Completion is expected late next summer.

Brooks said Safeway's strategic location is expected to serve customers from both the neighborhood and visitors from Waikiki.

It will be in the new "lifestyle" format, similar to the newly remodeled Safeway in Hawaii Kai, which features wood floors and expanded gourmet food offerings.

Plans for a gas station, initially proposed in February of last year, were scrapped after surrounding neighbors protested the potential traffic jams it would bring.

The Diamond Head-Kapahulu-St. Louis Heights neighborhood board voted to approve the Safeway project without the gas station last year following several presentations by Safeway's director of real estate, Steve Berndt.

But not all members were pleased with Safeway's arrival.

Neighborhood board member George Waialeale, who lives next door to the Safeway site, said traffic is still his primary concern.

"They're listening to us, but they don't hear us," he said. "The traffic on Kapahulu Avenue is horrendous as it is, and now we're going to add this store."

Tenants at the strip mall have been informed that their leases will expire in mid-September.

Dunkin Donuts and Baskin Robbins already are gone, and the space is on temporary lease to state Sen. Les Ihara (D-Kapahulu-Palolo-Kaiumki) for his campaign office.

Diamond Head Video will move to a temporary location at Kalakaua Avenue, near the Hawaii Convention Center, after 15 years at the strip mall.

A post office branch, Subway sandwich shop and discount Love's bakery also will be leaving.

JJ Diner, another longtime mainstay at the strip mall, likely will close its doors, according to owner Kenneth Lam, unless the restaurant finds a new location.