New plan calls for more HPU facilities at tower

Aloha Tower Marketplace would look less like a retail center and more like a university campus under the latest plan proposed by Hawaii Pacific University a year after it took control of the shopping and dining complex fronting Hono­lulu Harbor.

At the time of the takeover, HPU said it would enhance the retail component of the marketplace on the ground floor while adding student dorms to the second floor.

But under plans recently submitted to the state by Hawaii’s largest private university, nearly half or more of the marketplace’s first-floor space would become HPU facilities.

Under HPU’s plan the marketplace’s largest ground-floor space would be occupied by a library. Other HPU uses to replace retail space include a computer lab, housing office, fitness center, pool hall, graduate center, classrooms and an admissions and welcome center, according to the plan referring to the project as HPU’s Aloha Tower Campus.

Two current anchor tenants, Gordon Biersch Brewery Restaurant and Hooters, would remain, while several other retail spaces would be available for lease, according to the project site plan included in an August submission to state officials in connection with preparing an environmental assessment.

HPU’s latest plan is also a departure from the design put forward by developer Ed Bushor, who bought the marketplace, but not the land under it, in 2011 in a partnership with HPU. Bushor’s plan called for nearly all the ground-floor retail space to be leased to retailers and restaurants.

Bushor also wanted to turn an adjacent building at Pier 10 into a sports and entertainment complex with an indoor spectator capacity of 1,000 to 2,000 and accommodating university basketball and volleyball games, concerts, performances and other community events.

HPU’s plan calls for converting this area into a 250-seat lecture hall with a box office and some multipurpose space.

Todd Simmons, an HPU spokes­man, said the site plan submitted to the state is just the latest in numerous high-level conceptual designs and isn’t intended to represent final ground-floor space plans. He also said actual use of ground-floor retail space will depend on demand from commercial users, and that long-term uses haven’t yet been assigned.

"We’re working hard to attract new retail tenants and dining establishments," he said. "We are not at the end of the road yet."

Simmons did say, however, that the arena at Pier 10 had to be scrapped because the space wasn’t big enough for regulation Division II sports and can’t be expanded.

State officials with the Aloha Tower Development Corp., a state agency that leases the state-owned land under the marketplace to HPU and previously agreed to allow certain residential and educational uses on the property, declined to comment, saying they had not reviewed the revised plan.

Bob Endreson, an entertainment industry consultant who was working with Bushor, said the new plans don’t fulfill the original redevelopment concept and will dramatically reduce revenue the state receives from the marketplace.

"ATDC is allowing HPU to pay below-market rates for prime waterfront property and turn it into a campus and recreation center for its students," Endreson said in letters urging state Sens. David Ige and Donna Mercado Kim to investigate.

Endreson said his group with Bushor had more than 600 events planned at Pier 10 that would have generated $50 million a year but that they won’t happen under HPU’s plan.

"The circumstances and lost revenue makes the Stevie Wonder debacle look insignificant," he said in letters to the lawmakers, referencing a botched plan by the University of Hawaii to host a Wonder concert last year.

How HPU came to own Aloha Tower Marketplace is a tangled affair but basically boils down to a contract provision that Bushor settled and ATDC accepted.

Bushor bought the marketplace for $14 million with HPU as a partner and 80 percent owner in December 2011 from another private firm, and initiated the redevelopment plan for the 165,000-square-foot center, which last year was about 70 percent vacant.

Bushor proposed a $32 million plan calling for new retailers and restaurants, dorms for about 300 students, and the sports and entertainment complex.

Among new tenants Bushor said he lined up with letters of intent were the restaurant Hash House A Go Go and a bar and restaurant with bowling lanes called Lucky Strike.

Other tenants touted in a Bushor site plan included Tilted Kilt, Ginzu Sushi and Apple, though no binding commitments by any prospective tenants were made.

Bushor committed to complete redevelopment work by the end of last year, but HPU balked at funding the project with traditional bank financing and wanted to issue tax-free bonds instead.

HPU said the bonds would reduce its debt payment costs by about $60 million over 30 years but that it couldn’t issue such bonds as a nonprofit university if Bushor remained a for-profit partner. So last October HPU executed a contract provision to buy out Bushor for $5 million and removed him as project manager in November.

Michael Green, an attorney Bushor retained to fight the takeover, complained to the ATDC in January that HPU broke a commitment to finance the developer’s plan and intended to convert the shopping center into a second campus.

Alan Goda, an attorney representing the university, refuted Green’s assertions and said the retail component of Aloha Tower wouldn’t change substantially. "It’ll be enhanced," he told the ATDC in January.

Earlier, HPU Vice President and General Counsel Janet Kloenhamer had told the ATDC that the university wasn’t going to change the concept envisioned by Bushor, and that thriving retail on the first floor was essential to support debt financing payments.

Bushor settled the dispute in April and said the arrangement was a "win-win" for HPU, its students, himself and Hawaii. At that time a retail focus was still planned on the marketplace’s ground floor.

Later, in bond offering documents, HPU said it would maintain a "modest commercial purpose with restaurants, community events and student-oriented retail space" at the marketplace.

HPU sold $42 million of special-purpose revenue bonds in July to help finance the redevelopment plan.

To date, only one new commercial tenant has been announced, a bookstore with a coffee shop to be operated by Barnes & Noble College Booksellers Inc. The store is slated for a 7,200-square-foot space that was home to Pipe Dreams Surf Co. and will serve HPU students and faculty as well as the public.