La'ie (Honolulu suburb) to get $30M hotel
A property management company affiliated with The Church of Jesus Christ of Latter-day Saints plans to build a 200-room hotel in La'ie, the first hotel of its size along the Windward coast.
Hawaii Reserves, Inc. expects to begin development of the roughly $30 million hotel near the Polynesian Cultural Center in late 2005, with completion of the initial phase planned by early 2007.
Catering to North Shore and area visitors, the hotel would replace the 48-room Laie Inn, said Eric Marler, Hawaii Reserves executive vice president and chief financial officer.
O'ahu has not had a new hotel built since the Kalia Tower at the Hilton Hawaiian Village was finished in 2001. The free-standing JW Marriott Ihilani Resort Spa & Golf Club at Ko Olina was completed in 1993.
Local hoteliers have said that financing new hotels in today's market make them less profitable than a new time-share building or resort condominium building.
But, Marler said, "the occupancy numbers have become much stronger in the recent months here on O'ahu, and we feel that for the mid-market type product that we're talking about that there will be adequate demand to support our investment."
As a "general rule," Marler said, Hawaii Reserves does not partner with outside investors and will finance the hotel construction internally.
The eight-acre site is zoned for hotel use. Four separate three-story buildings are envisioned. The hotel will have a banquet facility, a restaurant, swimming pools and a small North Shore visitor orientation center.
The company has begun applying for city building permits and hopes to finish the process within a year. Construction would then begin.
Until construction starts, the Laie Inn would remain open.
In the first phase, 130 rooms would be built. If the initial phase performs well, 70 more rooms would be added in the next two years.
"We feel that the North Shore has a lot to offer visitors as an alternative, perhaps, or in addition to their experience at Waikiki," Marler said. "A family might want to spend some time in Waikiki and then might also want to come out and have a multi-day experience on the North Shore."
Hotel rates would be similar to that charged by a family-friendly property like a Residence Inn, Marler said. Stays at the new hotel would be less expensive than the higher-end Turtle Bay Resort, which attracts many golfers and business travelers.
Marler said he does not expect the new hotel to compete with Turtle Bay and already has discussed his company's plans with Turtle Bay executives.
Hawaii Reserves is targeting tourists as well as administrative officials meeting at Brigham Young University-Hawaii, parents visiting university students, athletic teams, and participants in university continuing education programs.
The hotel would be promoted along with the church-owned Polynesian Cultural Center.
Hawaii Reserves hopes the new hotel will attract visitors who want to spend a few days visiting the cultural center and experience world-class surfing, scuba diving, and hiking.
"A lot of activities that you might consider 'outer island' activities are available to people on the North Shore," Marler said.
News of the new hotel was welcomed by the North Shore Chamber of Commerce's interim executive director, Antya Miller.
"We're all trying to get people to make this their destination and stay out here because we feel that a lot of people just drive around the island and they don't know what they can do out here," Miller said.
The hotel also would provide management training for BYU-Hawaii's travel and tourism education students.
While new hotel openings on O'ahu have been rare in recent years, a major project is in the works. Outrigger Enterprises Inc. is planning a $350 million Waikiki hotel redevelopment to include time-share, resort condominiums and a new hotel that could be a mix of residential condos, hotel condos, hotel units and possibly time-share units.
The retail and entertainment portion of the Outrigger project is planned for completion in mid-2007. At Ko Olina, plans are also under way to build a combination 250-room hotel and 150-room condominium managed by The Ritz-Carlton Hotel Co.
New law to ease housing 'crisis'
Gov. Linda Lingle yesterday signed into law a bill aimed at helping fill the need for an estimated 30,000 more affordable housing units — including 17,000 rentals — in the next four years.
Senate Bill 2926 increases the bond authorization amount under the Hula Mae Multi-Family Housing Program from $200 million to $300 million to spur the development and rehabilitation of affordable rental housing projects.
Lingle signed the measure at the site of a planned affordable rental housing project for seniors in Iwilei. The 155-unit Senior Residence at Iwilei is intended to help the same target audience as the new law.
New Life in Kaka'ako (Midtown) - A Future Life Sciences Community
Kamehameha Schools is planning to kick-start a science-based development of its Kakaako land that could provide a shot in the arm to the urban district.
The plans represent a new Kakaako strategy for the state's largest private landowner, which owns some of the most strategic parcels in the area but has been criticized for failing to provide leadership on revitalizing the gritty neighborhood of bars, warehouses and car dealerships.
Officials with the charitable trust say it is their "fiduciary responsibility" to respond to the presence of the University of Hawaii's nearly completed John A. Burns Medical School and associated facilities, which were built in the district partly to serve as a nucleus around which Hawaii's young biosciences sector could coalesce.
"We thought it was an opportune time to look at our holdings in the area and we're committed now to being a major player in life sciences there," said Bob Oda, project manager with the estate's commercial real estate division.
No firm development deals are in the pipeline yet, but the $6 billion estate is applying for a special federal designation that would allow it to offer tax breaks to developers and other investors.
It also has brought together a steering committee of key financial, scientific and development players in the state and plans soon to announce a pair of "catalyst" development projects to kick things off.
It's about time, said Bev Harbin, a member of the Kakaako Improvement Association and frequent critic of the area's landowners.
"I used to have to hit them over the head and say 'do something!'" Harbin said. "But for the first time, I'm rather impressed with what the estate is doing. They're starting to walk the walk."
The estate of Bernice Pauahi Bishop, whose lands provide the income that funds the education of Hawaiian children, owns 52 acres in the heart of the 700-acre district, leased to a range of owners. Its holdings are less extensive than those of the state government and General Growth Properties, which owns Ala Moana and the various Victoria Ward retail properties. But Kamehameha Schools' lands are in the heart of Kakaako, spanning the mauka and makai sides of Ala Moana Boulevard.
These include parcels directly adjacent to the medical school. Now home to car dealerships and aging commercial low-rises, the trust hopes to lease these lands to developers and other investors that will build life-science research facilities and supporting commercial and residential developments.
The trust is putting together an application to have its area holdings designated a Community Development Entity under urban renewal legislation passed by Congress in 2000. This would allow investors to purchase equity in the entity and claim tax breaks of up to 39 percent on their investments.
The estate hopes the incentives, called the New Market Tax Credits, could reach $100 million and help to defray the high cost of building research-oriented space.
Ordinary office space generally costs around $300 a square foot to build. But Dr. Ed Cadman, the dean of the medical school an advocate of a life-sciences community centered around the school, says research facilities can run to $500 a square foot to build due to their special energy and ventilation needs.
That's a potential deterrent to developers, and the resulting local shortage is cited as a major impediment to growing Hawaii's life-sciences community.
"Think of Kakaako as a mall with the medical school as the anchor store. A lot of smaller stores are needed in that mall, too, but you need leasable research space or it won't happen," Cadman said.
The tax credits could provide a solution. State Act 221 technology tax credits are geared for investors with an existing Hawaii tax liability, limiting their usefulness for deep-pocketed mainland investors. But the estate hopes Act 221 and the federal tax credits together will bring in a healthy mix of both local and offshore investment.
"We want to provide the dirt and we let others come in with the capital," said Kirk Belsby, the estate's vice president for endowment.
Joining Belsby and Cadman on the group submitting the community development application is Dr. Leroy Hood, one of the world's leading scientists in molecular biotechnology. Now based at Seattle's Institute for Systems Biology, which he co-founded, Hood's work in the 1960s and 70s set the stage for the eventual mapping of the human genome. He also helped start a number of successful biomedical companies such as Amgen, Applied Biosystems and MacroGenics.
Belsby says the estate remains committed to life-sciences development even if it fails to secure the tax breaks. It has commissioned a $500,000 study from Washington, D.C.-based New Economy Strategies, expected to be completed next month, that will identify the most suitable life sciences disciplines to target. Options could include plant sciences, marine biology and biopharmaceuticals. The findings will serve as the trust's "road map" for Kakaako.
"Even if we don't get the tax credits, we'll have a base of knowledge we can proceed on," said Belsby.
Various visions for Kakaako have come and gone ever since the state set up the Hawaii Community Development Authority in 1976 to oversee redevelopment in the area.
But hopes are rising now that a key private landowner is stepping up.
"I'm very optimistic. I really think something is going to happen now," said Sanford Murata, former director of the estate's commercial real estate division.
Hawaii's improving economy is a key factor in the trust's timing, Belsby said.
"The difference today is that the market has improved. The economy has strengthened to the point where it now supports this kind of thing. And we also now have an anchor project in the medical school," he said.
Kamehameha Schools hopes to get the ball rolling later this year, when it will seek proposals for a pair of development projects viewed as catalysts. No specifics are available yet but the estate wants a research-use facility developed on the makai side of Ala Moana Boulevard next to the medical center, and a mixed-use commercial and residential development on the mauka side.
Cadman said any new research space is likely to be 100 percent leased up within six months, so great is the demand. He says a number of smaller California biotech firms already are waiting for space here and expects others to be lured by the cachet of a Hawaii headquarters.
But Pat Sullivan, president and chief executive of medical device-maker Hoana Medical, said it will take more than just new space. A concerted effort to improve Hawaii firms' access to funding also will be crucial. The company has offices nearby in Kakaako.
"There's a misconception that we need to attract companies to be transplanted here. What we really need is to build great companies of our own. That will provide the evidence that this is a good place to grow and do business," he said.
Timing also will be a key issue. Cadman said the earliest new leasable research space wouldn't be completed for about two years.
That may be too long, Sullivan said.
"Timing is the critical issue. Anything longer than that can have a profound impact on these companies," he said. "The technology business is so time-sensitive. It's critical that things get done quickly."