The city has granted Pacrep 2 LLC, the Los Angeles-based developer of the planned Ritz-Carlton Residences Waikiki Beach luxury tower, a Waikiki special district permit that allows the company to expand the project with an adjacent second tower.

City Department of Planning and Permitting Director George Atta conditionally approved the developer’s plan to build a new 39-story, 350-foot resort mixed-use tower on a nearly 2.6-acre lot at 2139 Kuhio Ave.

"In general the project will be of benefit to Waikiki, its businesses and nearby commercial establishments," Atta said in his report, which was issued Monday. "Visitors will be welcomed at the project’s ground level by an active landscaped open space featuring lush plant life, interactive uses, outdoor dining and gather space. The project will improve the streetscape along Kuhio Avenue, provide a pleasant pedestrian experience and promote social interaction."

Casey Federman, Pacrep LLC’s authorized representative, said developers accept DPP’s conditions.

"Feedback from the community and DPP’s guidance has resulted in a better plan overall for the Waikiki community," Federman said.

Atta’s approval came with stipulations that Pacrep soften its Kuhio Avenue and Lauula street facades using materials that give a Hawaiian sense of place and pay attention to the impact of exterior lighting on the neighborhood.

Atta also told Pacrep to increase the amenities, activities and commercial uses that it provides on the tower’s ground floor and open spaces. He recommended that Pacrep add outdoor seating, performance venues, interactive artwork, landscape displays, lei making and other vendor carts, display windows and retail to the project’s Kuhio Avenue frontage.

Atta limited the roof’s architectural elements to 12 feet above the tower’s 350-foot height but said Pacrep may go to 18 feet if it can show that it is in compliance with the land use ordinance. He ordered more traffic and wind studies and also made recommendations to improve parking and loading.

The approval also required that valet service be offered for at least 80 percent of the project’s off-street parking and rooms, which will have centralized mail and phone service, and that full hospitality, housekeeping, building maintenance and room services be available.

Federman said the adjustments maximize the distance between the new tower and its previously planned sister tower at 2121 Kuhio Ave. to minimize impacts to private views while preserving public views.

The changes also enhance the building design and landscaping to evoke a stronger Hawaiian sense of place, he said, adding that the increased retail presence will better integrate the project with Kuhio Avenue.

"Our goal from the beginning was to create a landmark property and destination in Waikiki and also to lead the way in bringing new life and energy to an area of Kuhio Avenue that many feel needs revitalization," Federman said.

Jason Grosfeld, senior managing director of Pacrep 2, said demand for 2121 Kuhio, its first Ritz-Carlton-branded tower, drove the company’s decision to build the adjacent 2139 Kuhio Ave. project.

"Hopefully we’ll start construction by the end of the year with delivery by the end of 2016 or early 2017," Grosfeld said.

Federman said 2139 Kuhio tower sales were strong at the July 7 kickoff, which built on earlier demand for the 2121 Kuhio tower. Eighty percent of the residences have been sold to buyers primarily from the United States, Japan and other parts of Asia.

The two-tower project drew mixed reviews at its last public hearing June 6.

Critics including some members of the Waikiki Neighborhood Board, nearby condominiums and Unite Here Local 5 say the project creates too much density, does not guarantee hotel jobs and does not offer enough parking. Despite modifications, some also argue the new plan violates Waikiki guidelines, which protect views and limit heights.

"It’s too bad that the DPP wastes everybody’s time because they obviously don’t listen. There were strong negative comments from the Waikiki Neighborhood Board, and they ignored the Waikiki Special District guidelines," said Mark Harpenau, whose view at the Four Paddle condominium will be blocked by the projects. "These are two massive ocean-facing buildings, and we’re lucky we even got a 75-foot gap between them. It’s not much. It’s not really anything to be happy about. They’ve essentially given them carte blanche."

However, proponents of the two towers, including the Hawai’i Construction Alliance, Pacific Resource Partnership, the AFL-CIOTrades Council and some members of Waikiki’s business and hotel community, say the two towers will improve a derelict stretch of Kuhio Avenue, create more public open space, enliven a tired retail corridor, reduce crime, create jobs and provide luxury hotel rooms.

"We’re very pleased with DPP’s decision to approve the permit. Many of our members are already working on 2121 Kuhio and are looking forward to working on the 2139 Kuhio tower," said Tyler Dos Santos-Tam, executive director of the Hawai’i Construction Alliance, which represents about 15,000 union carpenters, cement masons, bricklayers, laborers and operating engineers throughout the state.

While the construction industry is enjoying a resurgence, Dos Santos-Tam said this latest project comes as some of the cycle’s earlier projects wind down.

"It’s really positive to see new projects going forward, especially in Waikiki, which is always in need of renovation and reinvigoration,"he said. "This is the beginning of hopefully what will be a new wave of energy into that end of Waikiki."