Hotel planned at former site of NikeTown

Most everything in Waikiki seems to be getting bigger and more expensive, but California-based Robertson Properties Group’s redevelopment plans for King Kalakaua Plaza have taken an opposite tack.

The underperforming retail site, best known for its NikeTown store, is slated to be converted to a midpriced hotel catering to extended-stay travelers, said Tom Schnell, principal of PBR Hawaii, the architecture company hired by Robertson. Extended-stay hotels typically have a kitchen and cater to business travelers on a long assignment or employees being relocated.

A 65-foot-high retail building currently sits on the 1.05-acre site, which fronts Kalakaua and Kuhio avenues between Olohana and Kalaimoku streets. The plan calls for removing the building’s existing roof and adding three new floors, increasing the total building height to 100 feet, Schnell told the Waikiki Neighborhood Board on Tuesday. That’s a modest size given that the height limit for the site is 300 feet and can go up to 350 feet with City Council approval.

“It’s actually an adaptive reuse of the existing building, which is much more environmentally friendly,” Schnell said. “It’s a wide building, so we can get to 230 rooms without going as high as what is allowed.”

Renovation plans include keeping two levels of basement parking with more than 200 stalls, he said. The hotel will include a fourth-floor pool deck and its design will reflect the site’s history, which Schnell said included “a vast reserve of royal fishponds.”

Following Schnell’s presentation, 14 Waikiki Neighborhood Board members voted to support the plan and none voted against it.

Waikiki Neighborhood Board member Jo-Ann Adams said she favored preliminary plans, which appeared more viable than previous efforts.

Built in 1998 for nearly $45 million, King Kalakaua Plaza was formerly home to NikeTown, Banana Republic and The All Star Cafe, a sports restaurant and bar. The building on the Ewa end of Kalakaua Avenue had difficulty attracting shoppers and closed in 2009.

“I have no idea why the tourists could not cross the street, but they could not cross the street and use (the building),” Adams said. “Extended stay is something new in the portfolio for Waikiki.”

Developers and investors are increasingly interested in the U.S. extended-stay market, according to a report from Horwath HTL, a hotel industry consulting company.

Joseph Toy, president and CEO of hotel consultancy Hospitality Advisors LLC, said there is demand for extended-stay properties on Oahu. The construction boom, the high volume of military and government work, and the Canadian snowbird market produce constant demand for larger units with kitchens. While the average length of stay in Hawaii for visitors is nine days, Canadians stay 12.78 days on average, according to Hawaii Tourism Authority statistics.

However, Toy cautions that the extended-stay hotel market faces competition from condominiums and condotels. Also, there’s only a certain segment of the business portion of this market that would prefer to be in Waikiki versus at accommodations that are closer to where they work.

Unite Here Local 5, which represents hotel workers, has not taken a position on the project. The union’s research analyst, Ben Sadoski, said he was encouraged to see a developer building a full-service hotel without a timeshare or condotel component.

“It’s very important to keep full-service hotels in Waikiki,” Sadoski said. “We’ve felt for a long time that condotels are a threat to jobs. Owners may not join the rental pool.”

Mark Bratton, senior vice president of Colliers International, said adding additional hotel rooms also will shore up retail performance in what has historically been a less-trafficked side of Waikiki.

“There is four times as much foot traffic at the International Market Place,” Bratton said. “I imagine they’ll have some retail on their ground floors. If they add 230 hotel rooms, they could have 450 people on that site walking back and forth. It will help retail and restaurants on that end do better.”

Schnell said the project is undergoing an environmental assessment, which is expected to be published in late December. A public comment period is expected to run until late January, he said.