Developer enlarges Ala Wai project

Commercial subleasing has begun on the controversial $20 million Kalia Marketplace project that plans to bring two wedding chapels, retail and office space and return a boat repair facility to the Ala Wai Small Boat Harbor in Waikiki.

The project has grown in size and more than doubled in costs since 2010 when Japan-based developer Honey Bee USA Inc. filed a draft environmental assessment with details of its plan for the state’s largest recreational harbor. The company, headed by Hide­aki Shi­ma­kura, was selected by the state Department of Land and Natural Resources’ Division of Boating and Ocean Recreation in 2009 to lease and improve two harbor parcels covering 53,568 square feet.

The developer originally had planned to spend $9.7 million constructing two buildings that would put two wedding chapels in the harbor, add commercial space and replace an existing fuel dock and convenience store and the former boat repair business operated by Ala Wai Marine Ltd.

However, the company expanded the project’s scope to include more space for boat repairs and retail, said Hono­lulu attorney Keith Kiuchi, who represents Shi­ma­kura, a Kyoto-based developer who races yachts in Hawaii and Japan.

On the former boat repair site, Honey Bee now plans to construct three new buildings with a total interior of 40,000 square feet and a 17,000-square-foot boat repair dock with 51 parking stalls underneath, Kiuchi said.

"The concrete deck will cost almost $3 million. We did not initially budget for that, so we had to add additional commercial space to make up for it," he said.

Project permits are in the third-party review stage at the city Department of Planning and Permitting, Kiuchi said. If approved, the company hopes to begin building in May and has targeted March 2013 for an opening, he said.

If built according to plan, a four-story, 60-foot-high "Boatyard Building" fronting Ala Moana Boulevard will be the center of development, Kiuchi said. While the second floor will be all retail space, restaurant space will be available on the third floor, which has covered open lanais in its design, he said. The fourth floor, which will be dedicated to restaurant and office space, also would have covered open lanais, Kiuchi said. The first floor will be used for commercial boat ticket sales, retail kiosks and possibly an ice cream and sandwich place, he said.

A new two-story wharf building will rise 30 feet and will run parallel to the Ala Wai channel, Kiuchi said. The building, which will house restaurants, will feature a 6-foot-wide concrete walkway that runs from the boat haul-out slips to the wharf docks, he said.

"If you look at that area right now, it’s pretty beat up," Kiuchi said. "We’ll rehab that area and create some nice public space."

A "traditional" wedding chapel will occupy a two-story structure being called the "Canoe House," he said. Tutu Wedding Services, a Japa­nese company, has signed a letter of intent to sublease the space, he said.

In addition, Honey Bee will build a two-story, 11,000-square-foot modern wedding chapel, finger piers and fuel dock in the middle of the harbor, he said. The building, designed to look like a ship, will rise 25 feet, Kiuchi said. The first floor will contain a convenience store and training facility for the U.S. National Flat Water Kayak Team, he said. Gloria Bridal, which operates a wedding chapel at Sea Life Park, has signed a letter of intent to sublease the second floor, he said.

The project, which is intended to revitalize the Ala Moana corridor into Waikiki, is creating favorable buzz in commercial real estate circles since it began subleasing about a month ago.

"It could be a good opportunity for the right people," said Stephany Sofos, a Wai­kiki-based appraiser and real estate analyst. "This will give people who are not boaters a chance to come down to the water’s edge and meander and watch the boats and see the fish."

Sofos said the project could be another opportunity to create some of the waterfront attractions that draw crowds to Nico’s Pier 38, Uncle’s Fish Market & Grill and Hono­lulu Fish Auction.

The planned waterfront dining also is vaguely reminiscent of the former Fisherman’s Wharf, which was one of Oahu’s most popular dining spots in the 1950s and 1960s, she said.

"Fisherman’s Wharf was a destination location and one of the most successful restaurants of its era," Sofos said. "This provides a new opportunity for people to enjoy the water, and that’s what Hawaii is all about."

Still, the project has met with neighborhood opposition.The Waikiki community has not had an opportunity to review Honey Bee’s new plans, said Janet Mandrell, president of the Makai Society for Maritime Lifestyles.

"We have no idea what it looks like," Mandrell said, "but given our past experience, we aren’t very hopeful."

Mandrell and others who live in the harbor are concerned that Honey Bee’s plan does not dedicate enough space to boat repair. They also were skeptical that wedding chapels and other retail businesses would be a good fit for the maritime neighborhood.

"What we need is for them to provide an improved boat yard, haul-out and other maritime-related services. That’s what makes a world-class marina," Mandrell said. "Instead, we got a boat yard next to a wedding chapel. How’s that going to work out?"

Initial reviews from the Waikiki Neighborhood Board also were unfavorable.

"Last time they were here almost two years ago, we told them we didn’t want them to build it, mostly because their presentation didn’t address what they were going to do," said Waikiki Neighborhood Board Chairman Bob Finely. "It could be a wonderful project, but it’s sort of cloaked in mystery."

Finley said that he asked Honey Bee to gather more information and return to the Waikiki Neighborhood Board, but the developer has not complied.

Since the project involves a private company building on state land, Finley said it should be heavily scrutinized before given the go-ahead.

"When the Superferry pulled out of Hawaii, the state was left with a couple of docks that they had to pay for," Finley said. "What happens if this developer walks away?"