A church that bought Niu Valley Center in East Honolulu 11 years ago is selling most of the property and might later sell the rest as part of a deal that allows several restaurants and other tenants to buy their spaces.
King’s Cathedral & Chapels has agreed to sell the portion of the property that it doesn’t occupy to local developer Peter Savio for an undisclosed price.
Savio met with tenants Wednesday informing them of his plan to offer them the spaces as commercial condominiums that they could own instead of rent.
Prices range from about $600,000 for a 744-square-foot unit to $5.2 million for a 6,719-square-foot space. Shared ownership of parking and other common areas is included in the prices.
"I’m hoping all the tenants will buy," Savio said. "It’s not cheap. They’re going to have to make a sacrifice to buy."
One tenant, who did not wish to be identified out of concern over spoiling landlord-tenant relations, said there had not been time yet to analyze the offer, but that owning the real estate would be generally beneficial in the long term. However, the tenant added that customer traffic has not been that good.
Other tenants could not be reached Thursday for comment.
Niu Valley Center, built in 1968, was once a neighborhood retail complex anchored by Times Super Market. But the grocery store departed in 2002, and King’s Cathedral moved into the empty space in 2003. A year later the Maui-based church exercised an option to buy the entire 5-acre center from the Hawaii Electricians Pension Trust Fund for about $14 million.
Some community members complained about the change and feared that the church would ease out other businesses so it could expand.
In 2005 a KFC franchisee sought to break its lease by filing a lawsuit that claimed church plans for opening a bookstore specializing in religion, an infant nursery, a preschool and youth classrooms make the property primarily a religious facility.
Since then a new Jack in the Box recently was built in place of the old KFC. Other tenants on the property include 7-Eleven, OrthoSport Hawaii, Le Bistro, Japanese restaurant Gyotaku and Lung Fung Chinese Restaurant.
If tenants decline to buy their spaces, Savio will try to sell the spaces to investors who would have to honor existing leases.
King’s Cathedral has previously tried to sell at least part of the property as commercial condos. A 2013 listing on the online commercial real estate listing service Loopnet advertized 12 spaces available at prices from $439,575 to $2.8 million.
Savio said the church, which occupies 37,570 square feet in the 66,786-square-foot center, is looking for a smaller home elsewhere in East Oahu. If that happens, Savio has an option to buy the church space at Niu Valley Center, which he said he would try to sell to a grocery store. A drugstore would be an alternative, as would dividing the space into smaller pieces for sale.
Joe Leonardo, a broker involved in the sale between the church and Savio, said he is looking for a smaller space for the church, but said King’s Cathedral could stay where it is.
King’s Cathedral, formerly the First Assembly of God Kahului, envisioned its Niu Valley location would be a main hub on Oahu. The church also operates in Kaneohe and Kapolei.
