College students might one day be living above waterfront shops and restaurants at Aloha Tower Marketplace as part of a plan to reinvigorate the struggling shopping center at Honolulu Harbor.
Hawaii Pacific University is negotiating with a developer that recently bought the marketplace to convert the largely vacant second level of the complex into student lofts with 250 beds.
There could even be space at the 165,000-square-foot open-air mall for academic programs or other facilities for the state’s largest private university, which is based downtown.
A major emphasis would remain on entertainment-oriented tenants on the marketplace’s ground floor, which is anchored by Hooters and Gordon Biersch Brewery Restaurant.
The plan is among a variety of renewal ideas being considered by marketplace owner Hawaii Lifestyle Retail Properties LLC, and would need a rule change from a state Department of Transportation board that owns the land under the marketplace.
But if realized, such a transformation would help HPU achieve part of a major expansion goal while adding new activity and life to the marketplace, which is about 70 percent empty and has suffered chronically high vacancy for most of its existence.
“Hawaii Pacific University is extremely interested in the proposed redevelopment of the Aloha Tower Marketplace,” Geoffrey Bannister, president of the nonprofit university, said in a statement. “It would be an ideal opportunity to strengthen our downtown presence, provide students with an optimal living-learning environment, and create the kind of urban campus experience that will be essential to the university’s future.”
Bannister has explained to university staff that leasing part of the marketplace would help deal with an acute housing need for students, many of whom are from other countries. Adding housing and perhaps additional facilities downtown also would save time and money in trying to expand the school.
HPU announced an expansion master plan for its 135-acre Hawaii Loa campus in Kaneohe in 2008, and this year is asking the Legislature to approve $120 million in special-purpose revenue bond financing. The university has dormitory space for 200 students at the Windward campus and no student housing downtown.
Since Bannister was hired as president last year, additional focus has been put on creating student housing downtown for more of HPU’s roughly 8,000 students. Meanwhile, Bannister has been reassessing plans for the Windward campus.
“Even with the current planned expansion at our Hawaii Loa campus, in order to meet increasing needs, much, much more must be done at our other locations, with particular emphasis on our downtown location, if HPU is to maintain its educational standard of excellence,” he said in written testimony to the Legislature earlier this month. “HPU’s housing analysis has shown conclusively that the vast bulk of student demand is for downtown housing.”
Ed Bushor, a principal with marketplace owner Hawaii Lifestyle, said HPU is a “prime candidate” for leasing much of the empty space, though there are others in the running.
Bushor is a real estate investor and developer who co-founded San Diego-based eRealty Cos., a firm that has acquired several Hawaii properties in recent years including the The Modern Honolulu hotel (former Waikiki Edition), the former Ohana Waikiki Surf hotel towers and the Airport Center office building.
Bushor said a firm plan to enhance the marketplace and provide a lively amenity for downtown Honolulu is probably a month or two from being finalized.
“This is a beautiful place, and it really needs to be revitalized,” he said.
Aloha Tower Marketplace was built in 1994 by a local development partnership for $100 million. It was supposed to be the first phase in a $700 million, five-phase project that also included two condo towers, an office tower, a business hotel, a cruise terminal, 2,000 underground parking stalls and a Nimitz Highway pedestrian overpass.
But financing and market demand dried up, and original developer Aloha Tower Associates couldn’t complete additional phases. A lack of critical mass that was supposed to come from residences, the hotel and offices hurt marketplace business, as did a lack of parking.
The marketplace was forced into bankruptcy in 1997, and a year later new investors acquired the project. But a turnaround eluded the second owner, and in December that investment group, known as AHI Aloha Associates LLC, sold the marketplace to Hawaii Lifestyle.
Bushor said marketplace occupancy is about 30 percent, which includes a handful of nonretail tenants such as a New Hope church, a massage academy, a residential real estate office and an athletic club.
Bringing in new retail and entertainment tenants is part of the revitalization plan. Bushor said the renewal project will benefit the community, and added that he would be pleased if a deal works out with HPU, downtown’s third-largest tenant after Bank of Hawaii and First Hawaiian Bank.
