A roughly $300 million Waikiki retail complex slated to replace the International Market Place, Waikiki Town Center and the Miramar Hotel has finished an environmental review that puts the project on pace to break ground next year.
A first step will be demolishing the more-than-50-year-old hotel and retail bazaar that many people consider a landmark.
Project developer TRG IMP LLC, an affiliate of Michigan-based mall developer Taubman Centers Inc., recently filed a final environmental impact statement with the state, clearing a major regulatory requirement for the ambitious plan.
Taubman anticipates obtaining necessary permits to start construction next year. Opening the center is projected for 2015.
Local retail real estate analyst Stephany Sofos said the mostly three-story project with 355,000 square feet of leasable space will be the biggest retail change for Waikiki since Outrigger Enterprises redeveloped a section of Lewers Street into Waikiki Beach Walk in 2007.
"It’s the size of Royal Hawaiian Center," she said, referring to Waikiki’s largest shopping center.
Sofos said more retail will be great for tourists and create new opportunities for retailers to be in Oahu’s tourism hot spot. But she also questions whether there will be enough demand to fill so much store space. "It might create some saturation," she said. "That’s a lot of retail."
If successful, redevelopment will realize an idea that landowner Queen Emma Land Co. has mulled since 1998, and generate income for Queen Emma Land parent and nonprofit hospital operator The Queen’s Health Systems.
Taubman, in the environmental report, said the new center with an open-air setting that preserves several large canopy trees, including an exceptional banyan on the site, will celebrate International Market Place’s iconic and nostalgic past.
"The project is intended to become a world-class retail, entertainment and dining destination infused with Hawaiian culture which meets the demands of today’s urban resort destination visitor and renews the appeal of (the International Market Place) to local residents," the report said.
The new center would roughly double the amount of retail space on the 6-acre site, which is home to about 170 stores, carts and kiosks plus 25 food vendors.
The developer said the project will enhance the streetscape of Kalakaua and Kuhio avenues, improve traffic along Kuhio, increase jobs and tax revenue, and feature cultural elements that convey stories of Queen Emma, King Kamehameha IV, Prince Albert Edward and their contributions to the health and care of Hawaii’s people.
However, there will be short-term negative impacts — primarily the displacement of existing tenants and the shutdown of the hotel.
The 21-story Miramar, with 358 rooms, has been in business since 1970. About 100 full- and part-time employees work at the hotel. There are another roughly 570 employees at the International Market Place and Waikiki Town Center. Taubman projects that the new center will create 2,590 on-site jobs for a gain of roughly 1,800 jobs.
During construction, an estimated 2,435 jobs will be created or supported, the developer said in the report.
Taubman said state and city tax revenue from the property will rise, though some of that will be offset by the loss of transient accommodation tax revenue from the Miramar.
The developer plans to mitigate traffic impacts by adding an eastbound lane on Kuhio fronting the project for right turns into the center’s parking structure as well as for van, shuttle and valet use. Taubman said the changes will improve circulation on the street.
There will be 776 parking spaces in a five-story garage. Presently the property has 220 parking stalls in a six-story structure.
As part of the environmental study, the developer explored the possible presence of Native Hawaiian burials and other culturally significant deposits by digging 67 test trenches on the property. The tests discovered an imu pit and artifacts representative of pre-Western contact, as well as three human burials for which a treatment plan will be prepared.
Testing also discovered historic road paving, basalt stone curbing and a bottle cache from an earlier and significant time in Waikiki’s tourism industry.
The developer will consult with lineal and cultural descendants, the Oahu Island Burial Council and the State Historic Preservation Division of the state Department of Land and Natural Resources on a treatment plan.
Because it’s possible that additional historical discoveries may be encountered during construction, the developer plans to establish an archaeological monitoring program approved by the Historic Preservation Division.
The marketplace was built in 1957 by Paul Trousdale, Clint Murchinson Jr. and Donn E.R.G. Beach on land leased from what was then Queen’s Hospital. The landowner acquired the marketplace in 1998. In 2008, Queen Emma Land solicited development partners to lease the site, and selected Taubman and real estate finance partner CoastWood Capital Group LLC in 2010.
