Under a big white tent behind a green construction fence in East Kapolei on Thursday, there was much appreciation expressed along with doubt confessed over the long-planned Ka Makana Ali‘i regional mall.
The developer of the $500 million project, DeBartolo Development, held a groundbreaking ceremony for the 1.4 million-square-foot complex nine years after it was announced.
"I know there are a few people here today who were skeptical that we were going to get this development out of the ground," said Ed Kobel, president of the Florida-based company.
Kobel thanked many individuals who provided support, including government officials and representatives of lenders, tenants, the construction industry and his own company — some of whom at times questioned whether Ka Makana would become reality.
Opening the mall on 67 acres leased from the state Department of Hawaiian Home Lands was originally projected for 2009 after DHHL selected DeBartolo through competitive bidding. However, tough negotiations over a potential $1 billion lease, permitting issues and the economic recession hampered progress. Some retail industry analysts also questioned whether enough demand from shoppers and tenants existed to make the deal happen.
Mayor Kirk Caldwell attended Thursday’s ceremony with some perhaps half-feigned amazement. "Wow," he said, "I can’t believe I’m out here actually celebrating the groundbreaking of this project."
Caldwell recalled having discussions about the project while he was a member of the state House, then city managing director and now mayor. "I just kept thinking, Is this for real or what?" he said.
Jobie Masagatani, DHHL’s director, recalled what she termed arm-twisting of DeBartolo over the lease, which at times seemed in doubt until it was signed in December. "It has been a journey, truly," she said.
Gov. David Ige called Ka Makana a long time coming and expressed congratulations to all involved.
In January 2014, DeBartolo and a similar contingent of government officials had a celebratory blessing on the site that included prayers, untying a maile lei and a special appearance by football Hall of Famer Jerry Rice, who was in town for the Pro Bowl and passed out signed footballs. Yet at that time DeBartolo had not signed a lease.
This time it’s clear that Ka Makana is on its way to being built. Grading work actually began about six weeks ago, and heavy earth-moving machines were at work during Thursday’s event.
"It’s just so exciting for this day to come," said Geza Henni, president of DeBartolo Holdings LLC, the parent of Ka Makana’s developer. "It’s just amazing."
The mall is being built in two phases. An initial phase with 750,000 square feet of space for Macy’s, Forever 21, H&M, Old Navy, Gap, Banana Republic, Consolidated Theatres, Hawaii’s first Hampton Inn & Suites and other tenants is scheduled to open in the fall of 2016.
A second phase would add another almost 700,000 square feet including retail, a second hotel and office space.
If both phases are built, Ka Makana would become the third-largest shopping center in Hawaii and the first regional mall built on Oahu in more than 30 years.
By comparison, Ala Moana Center is 2.2 million square feet excluding a 660,000-square-foot addition under construction, and Pearlridge Center is 1.2 million square feet. Ka Makana will be 1.4 million square feet, but that includes two hotels and about 200,000 square feet of office space.
Ka Makana also could become the largest job center in the Kapolei area, with 6,500 jobs created by businesses at the complex after it opens. Building the mall is projected to provide 3,000 construction jobs.
Caldwell said the new job base will be a sorely needed addition to the "Second City" of Oahu where many more people live than work.
Kobel said the vision for Ka Makana is that it will become a town center for the greater Kapolei region.
For DHHL, lease rent stands to become the biggest single source of income for the agency, which is backlogged in its mission to provide homes for Native Hawaiians.
The lease starts at about $3 million to $4 million in annual base rent and grows to total $400 million over 65 years. Additional rent based on a percentage of tenant sales could generate another $400 million over the same period. An option to extend the lease to 85 years could give DHHL more than $1 billion.
"That’s thousands and thousands of homes for Hawaiian people," Kobel said. "That is just really super, and we’re just honored and happy to be part of that."
