This time, Kawamoto is conquering Kahala

The oft-maligned Japanese billionaire has bought more than $100 million worth of properties in the affluent neighborhood

Gensiro Kawamoto has a new nickname these days -- King of Kahala.

In the last 24 months, the Japanese billionaire has quietly invested in more than 15 homes on Kahala Avenue amounting to more than $100 million in property investments.

While some are simple old-style Hawaiian homes valued at about $2 million, others are oceanfront mansions priced up to $20 million. His most recent acquisitions include the home at 4631A for $19.8 million in February, and the home at 4585 Kahala Ave. for $9.7 million in March.

The latest transactions appear to be a shift from investments in Hawaii Kai and Portlock to Kahala, done primarily through tax-free 1031 exchanges. Neighboring homeowners worry that Kawamoto, who's developed a reputation as a neglectful landlord, will leave the Kahala mansions in similar disrepair.

The Japanese tycoon has developed a reputation of putting the minimal amount into property maintenance and upgrades. But whether he can get away with it in an upscale neighborhood like Kahala remains to be seen.

During the late 1980s, Kawamoto randomly acquired up to 200 Hawaii homes and properties, but left many in disheveled state during his absence for 10 years. He blamed his property managers for not keeping him informed.

Neighbors and former tenants said Kawamoto let the properties, and their problems, fester.

What Kawamoto plans to do with all of his Kahala investments remains unclear.

Kawamoto, a citizen and resident of Japan who lives part of the time in Honolulu, could not be reached for comment. His attorney, John P. Manaut, of Carlsmith Ball LLC declined comment without permission from his client.

Realtors specializing in the Kahala area speculate that he could sit on the homes for another five years, or sell them off in increments.

It's hard to go wrong with Kahala, according to Anita Bruhl, veteran Realtor and a vice president at Mary Worrall Associates.

Kahala, in real estate circles, is just as renowned as Palm Beach or Beverly Hills, she said.

"Kahala is a household word," Bruhl said. "Whenever you buy in Kahala, it's always a good investment, as long as you hold it long enough."

Two of Kawamoto's acquisitions from last year -- 4337 and 4398 Kahala -- are listed by Pat Choi of Choi International for $2.6 million and $2.9 million, respectively.

To Kawamoto's credit, most of the homes, including the ones listed by Choi, appear to be in good condition. Some appear to be occupied, with ongoing upkeep and maintenance.

But the vacant lot he owns at 4465 Kahala Ave. is overgrown with weeds -- enough to provoke a letter of complaint from the Kahala Community Association to Kawamoto's attorney at Carlsmith Ball.

Aside from a letter of complaint about the lot, the association also wrote a letter about taking the trash out before the scheduled collection day for another Kahala Avenue home. The letters go to the homeowners first, and subsequently to state agencies if there is no response.

Another property at 4744 Kahala Ave. remains empty, with shriveled plants and a dying landscape.

The property sits in limbo due, no doubt, to a lawsuit Kawamoto filed in March against a reputable Japanese landscaper, Crane & Sekimizu Corp.

The eccentric tycoon, now close to his mid-70s, is known for approaching property owners at random, usually when the homes are not listed.

Don Eovino of Eovino & Associates was surprised when Kawamoto walked in last year and offered cash at his open house for a former Hemmeter Estate at 4807 Kainapau Place.

Eovino had been expecting to tear down the existing estate and build a brand new one he would price around $20 million, unless someone wanted to buy it "as is" for $12.9 million.

"Kawamoto walked in at the last hour," said Eovino. "He had seen the property when the previous owner owned it and tried to buy it then, but it was tied up with title problems."

The two struck a deal, with no broker in between, and closed the sale in cash.

Kawamoto also bought the two adjacent lots for $6.2 million.

Since purchasing the properties, he's knocked down the former caretaker's quarters, but renovations still appear to be under way.

Lawsuit targets landscaper

Lucinda Pyles, a Waialae-Kahala neighborhood board member, said the properties on the 4700 block of Kahala Avenue -- the ones embroiled in a lawsuit with the landscapers -- at one point had weed growing higher than the fence.

Kawamoto's suit alleges that Crane & Sekimizu did not complete the work requested for the price agreed upon in the contract.

Crane, which for more than 30 years has designed Japanese-style gardens for high-profile clients like the Hawaii Prince Hotel, was supposedly building an elaborate rock pool with water features.

A response filed by Sekimizu's attorney, Jeffrey Griswold of Lyons, Brandt, Cook & Hiramatsu, says that his clients did carry out their part of the contract, and are waiting for their payment.

Sho Horiuchi Realty Inc. also filed a suit against Kawamoto in February, alleging that he failed to pay 5 percent commission for homes a real estate agent sold for him at 353 Poipu Drive and 179 Nawiliwili St.

Pyles, who formerly served on the Kahala Community Association board, said residents would be concerned if there were numerous properties lacking maintenance.

Volunteer residents comb the neighborhood and report violations, such as whether a landscaper took trash to the curb ahead of the appointed day of the week, or hedges are overgrown. Kahala's property deeds come with its own covenants -- some of which are stricter than the city's -- requiring generous setback boundaries, upkeep and maintenance.

The residential lots "shall at all times be landscaped and kept in a neat and attractive condition, and all trees, shrubs and grass thereon shall be kept in good and neat condition," says the covenant.

"The issues are not only of appearance, but hazards of fire, mosquitoes and rodents," Pyles said. "I do believe there were complaints. The city was contacted and now it's being maintained."

However, the association has no authority to enforce rules, and there is no law requiring homeowners to occupy their homes.

If Kawamoto were to rent the Kahala Avenue homes, the average rates range between $9,000 to $10,000 per month, according to Cathy George of Cathy George & Associates Inc.

"I'm sad to see it because he is not one who seems to take care of his properties," said George, who brokered some of the sales and purchases of Kawamoto's East Oahu homes in the past. "It's one of the most choice areas, and it would be sad to see it not being kept up in the normal fashion."