Newspaper building near sale

A California developer is close to buying the property on Kapiolani Boulevard that once housed the Honolulu Advertiser, six months after the newspaper and its competitor, the Honolulu Star-Bulletin, which also operated for years there, were consolidated into the Honolulu Star-Advertiser.

Developer Franco Mola, president of Coastal Rim Properties Inc., said the historic News Building at 605 Kapiolani Blvd. and the land it sits on is in escrow.

"We’re still in due diligence phase," Mola said. "There’s a lot of open issues."

Mola would not disclose the price or what he intends to do with the property and News Building.

The building’s assessed value is $1.9 million, while the assessed value of the land is $14.7 million, according to city records. The 3.69-acre site includes a parking lot and two buildings totaling 138,000 square feet.

Joseph Haas, managing director of CB Richard Ellis Hawaii, the sales broker, said that before the deal closes, "There are some contingencies that need to be removed."

The property is owned by Gannett Pacific Corp., which sold the Advertiser to Oahu Publications Inc. in May. Gannett had been planning to redevelop the property for the past 10 years.

"It’s a unique property — combining a historic preservation building … with the potential redevelopment of warehouse sites," said Mike Hamasu, director of consulting and research at Colliers Monroe Friedlander Inc. "It’s probably going to be a challenge to maintain the facade and make it cost effective for whoever’s moving in.

"Financially you’ve got to look at it for how much it’s going to cost to develop and redevelop the site — there are a lot of unknowns," Hamasu said. Land along Kapiolani Boulevard is typically worth between $100 and $150 a square foot, he said.

Eye Productions Inc., which produces the TV series "Hawaii Five- 0," moved its offices into the building this month. The film company has also been using the buildings for sound stages, sets and a base camp since June.

Gary Slovin, managing partner at the law firm Goodsill Anderson Quinn & Stifel, said the firm is in discussions with Mola to possibly lease the building after he buys it. Goodsill has offices at Alii Place downtown, but its lease expires in 2013.

"We have looked at the News Building and talked to the developer because of the building’s history — we did some legal work for Gannett," he said. "We haven’t made any decision yet."

Mola’s company has developed major projects in the western states and Hawaii for more than 20 years.

In early 2005, Gannett began publicly seeking a partner to redevelop the News Building site with commercial real estate firm Grubb & Ellis CBI, but the plan didn’t lead to a deal.

Then in late 2007, Gannett retained CB Richard Ellis with the idea to again solicit redevelopment proposals. Again the plan didn’t move ahead to a point where bids were sought.

In late 2008, Gannett announced it wanted to sell the property next to the Advertiser’s News Building, but not the News Building itself. Gannett also retained CB Richard Ellis for that project. There was no asking price for the nearly 3-acre parcel.