Condo builder may buy adjacent property

Sales were strong last week for condominium-hotel units in a planned Ritz-Carlton tower in Waikiki slated to start construction this summer, so why not build another one?

That’s what the developer of the Ritz-Carlton Residences Waikiki Beach is considering.

Los Angeles-based PACREP LLC is exploring the feasibility of buying land next to its 38-story Ritz-Carlton project and developing a second condo tower that could be annexed to the first tower.

PACREP disclosed the possibility to buyers in a disclosure document for condo sales.

Jason Grosfeld, a PACREP principal, declined to elaborate on the idea. “We’re considering our options,” he said.

According to the disclosure document, PACREP may elect to develop an adjacent tower as a separate condo or merge it with the Ritz-Carlton tower and possibly give owners in the second tower access to amenities and services in the first tower.

The adjacent lot being eyed by PACREP is owned by Food Pantry Ltd., an affiliate of kamaaina grocery retailer Foodland Super Market Ltd.

Food Pantry’s lot is a little under 1 acre, or 38,000 square feet, and was once part of the old Magoon Estate that was sold off in pieces in the 1990s and led to the development of the luxury retail complex 2100 Kalakaua, also known as Luxury Row, and the Ritz-Carlton tower.

Food Pantry bought its piece in 1997 for about $13 million, demolished existing buildings on the site that included retail shops and the low-rise Hotel Honolulu, and converted the property largely into a parking lot with 67 stalls.

The grocery retailer, which has two stores in Waikiki, has indicated previously that its long-term plan was to build a grocery store on the site.

Food Pantry officials declined to comment Wednesday.

PACREP bought its site, which is 1.3 acres, last year for $15.5 million, according to property records.

The developer obtained permit approvals earlier this year and launched sales Saturday. Buyers snapped up 263 of 309 units, or 85 percent of the building where units are priced from $650,000 to $15 million. Construction of the estimated $180 million project is scheduled to begin in the late summer and be finished in early 2016. Commercial tenants in the tower will include a Dean & DeLuca luxury food market, farm-to-table restaurant BLT Market and the first restaurant outside Japan for the Edo-style sushi bar Sushi Sho.

PACREP encountered some opposition to its Ritz-Carlton project from the Waikiki Neighborhood Board and many neighboring condo residents because the tower’s long side is positioned to be parallel with the ocean and mountains, an orientation that provides every unit sweeping ocean views over Fort DeRussy.

Opponents, who included residents in the neighboring Four Paddle building who stood to have ocean views blocked, claimed that Waikiki Special District Design guidelines require the long side of buildings to be perpendicular to the ocean and mountains. The city Department of Planning and Permitting disagreed.

Several residents appealed the city’s decision but later withdrew the appeal over expense and potential liability issues.

Mark Harpenau, a Four Paddle resident who objected to the tower’s orientation, said the Food Pantry site’s shape probably necessitates that a tower there be angled toward the ocean, though it would still add to what he and other Four Paddle residents described as a wall going up along Kuhio Avenue.

“Holy smokes,” he said. “If they put another tower there it would really put up a wall — even if there’s a little space between the towers, it would be disastrous.”