The owner of the International Market Place is reviving plans for a massive redevelopment of the nostalgic 1950s bazaar and surrounding properties at the center of the bustling Waikiki shopping district.

The revised project is expected to exceed the $100 million to $150 million earmarked for an initial redevelopment proposal announced in 2003, according to Les Goya, vice president of Queen Emma Land Co., which owns 18.5 acres in Waikiki, including the seedy 50-year-old marketplace on nearly 2.9 acres.

The redevelopment means some 200 tenants, most of whom are on month-to-month leases, will be displaced. A time frame hasn't been determined, though renovations are expected to begin as early as 18 months, when most of the ground leases on the nonprofit landowner's Waikiki properties expire.

“;Right now, all economics are down. If we cannot work, I don't know what we're going to do,”; said Kelly Hong, 59, who has operated KNH Jewelry & Gifts at the Waikiki Town Center since 1986. “;If income sources stop, it's going to be terrible.”;

Despite the upheaval in the financial markets, tourism downturn and forecasted local recession, the landowner said it has been solicited by at least a dozen interested parties, including local and institutional investors from the mainland and overseas, seeking to revitalize the aged, termite-damaged properties, said Mark Yamakawa, Queen Emma president.

“;We believe in the long-term future of this economy,”; he said, adding that the timing may be advantageous to construction costs. “;These properties generate a fairly substantial amount of income.”;

 
• Big Changes May Be Coming To International Market Place

 

 

 

The International Market Place is a unique place, a reminder of an older era of Hawaii.

 

[ Watch ]

 

 

 

 

  Queen Emma plans to issue a request for proposals through New York-based Eastdil Secured LLC for developers to finance and rebuild nearly 6.5 acres beneath the outdoor marketplace and attached Waikiki Town Center, home to a cluttered hodgepodge of carts, kiosks and stores known for their imported aloha wear, handmade candles, and inexpensive jewelry and trinkets.

“;This is unique to Waikiki,”; said Tracey LePlastrier, a 36-year-old Australian tourist who first visited the International Market Place 15 years ago. “;I like it the way it is. It's more of what you would expect on a tropical island.”;

The landowner plans to lease the parcels to a developer, who will control future rent increases and tenant contracts. Queen Emma plans to meet with tenants on its proposal next week.

The revitalization into a “;mixed-use resort destination that includes shopping, dining and entertainment”; also includes Perry's Smorgy Restaurant and Food Pantry across the street on Kuhio Avenue. A developer has the option of including the Miramar at Waikiki hotel in the redevelopment.

  Queen Emma had planned to raze the shabby commercial site in 2005 to make way for a more upscale retail and entertainment center, but financial restrictions forced it to re-evaluate its initial proposal.

It is now seeking “;the best and highest use”; of the properties as part of its fiduciary duty to support the Queen's Medical Center and Molokai General Hospital. That could include building additional hotels, apartments and parking structures, the landowner said.

The International Market Place and Waikiki Town Center generate about $1.2 million in gross revenue per month, though vacancy remains high at 25 percent and 15 percent, respectively.

“;If you look at the short term, I'm concerned for these people, but if you look at the long term, it could attract more people to this place and maybe business will be better,”; said Justin Hwang, 32, who has operated Tropical Candles, a tiny kiosk at the Waikiki Town Center, for seven years.

Julia Kim, who helps out at Jackie's Gift Shop, one of two businesses operated by her aunt and uncle, said most tenants are disheartened by the impending rebuild of one of Waikiki's last old-Hawaii destinations.

“;It's kind of a sentimental memory for everyone,”; she said, adding that her aunt and uncle, who are in their late 60s and 70s, are considering moving back to South Korea after 20 years in Hawaii because they feel they're too old to find work elsewhere. “;They're kind of disappointed and sad - it's their sole source of income. They've kind of given up.”;

  Some workers are concerned that the redevelopment will not just displace some 200 tenants, but also affect wholesalers and manufacturers.

Queen Emma's ground leases also expire in 2010 for the Miramar, Ohana Waikiki West, Celebrity Resorts Waikiki - the former White Sands Waikiki Resort Club, Hawaiian Prince Apartments and three condominium developments totaling 54 units on Kanekapolei Street, though plans for revitalizing those properties haven't been determined.

Isle travelers say the outdoor bazaar has been one of Waikiki's most treasured visitor attractions, with tourists repeatedly returning on visits to Hawaii.

“;This is the one place I visit every single time I come here,”; said California resident Dennis Potts, 50, who has traveled to Hawaii annually for the past 16 years. “;It's the one place I feel like I'm getting a bargain. I would miss it.”;

Visitors were not consoled by the few things that will withstand the ever-changing Waikiki landscape, including the historic banyan tree that shades the marketplace and the similar banyan at the Smorgy restaurant site.

“;Once it goes, it will never come back or be the same - it's gone,”; said Australian visitor Cathy Hillberg, 65, who was shopping at the Waikiki Town Center yesterday. “;There's enough high-end stores and shops I can go to at home and anywhere in the world. This has character.”;