Weeks before the Black Friday crowds were to show up at Ka Makana Alii, Rich Hartline knew they’d be there in force. The tip-off was the throngs of people who turned out for the grand opening more than a month earlier.
West Oahu residents clearly are the bedrock of the shopping mall’s market, as well as a primary source of its workforce. Almost all of the employees at the Hampton Inn &Suites by Hilton are west-siders, said Hartline, and staff at retailers’ town-side branches entered a lottery for a transfer.
The vice president of Hawaii development for DeBartolo Development is finally seeing the completion of the project, delayed for years. His wife and two children moved to Kailua three years ago. And for now he’s happy to stay put. Born in Philadelphia, Hartline was shuttled through 10 moves as a kid and three high schools.
Ka Makana Alii is drawing mostly kamaaina, but some tourists will soon follow. Besides clientele of the Hampton, a shuttle for Ko Olina Resort guests will debut shortly, Hartline said.
One prize DeBartolo anticipates: the arrival of Limon Rotisserie, the celebrated restaurant, opening its first beyond greater San Francisco in Kapolei. Food and entertainment, such as the Olino all-recliner movie theaters, are part of the attraction for retail these days, he said.
“What you see out here is a higher balance of food, entertainment, hospitality and retail, as opposed to maybe even 15 years ago — much less food,” he said. “Even retailers had exclusions against food near their door, because they said, ‘If she’s eating, she’s not going to come in and shop.’
“Today I have leases where they want X amount of food, and particular names of food, because they know people end up shopping through that experience.”
Question: What is the time frame for completion of the center?
Answer: What you see out here today is what we call Phase 1, or the initial opening of Ka Makana Alii. And we do have a lot more tenants that are signed up in lease that will be opening over the next year. …
We’ve anticipated that the square footage that we have currently constructed — which is approximately, including the hotel, about 700,000 square feet — to be fully occupied by mid to late next year. …
After that, we have work over by the 24-Hour Fitness. … We also have other projects that we’re going to initiate next year that would then start opening into 2018.
And then the balance of the entitlements and the area on our ground lease with DHHL (Department of Hawaiian Home Lands) is what we call Phase 2. We’re looking to get that started, under construction, in the next two years, and it will probably deliver to market in early 2020, 2021 …
Q: When it’s finally built out, what’s the magnitude of this place?
A: Our entitlements — kind of our constraints, if you will — we’re approved up to and over, technically, 1.5 million square feet of mixed use. No residential, but we do have all other (Business Mixed Use) BMX-3 and -4 uses.
We’re approved initially for 500 rooms of hotel (at the Hampton). We’ve opened 175 rooms. … And we are very bullish on another hotel. So we’ll be opening another hotel on the property. With that remaining 325 rooms, we’ll probably do something, maybe not that full amount of rooms, but somewhere between 150-250 more rooms out here.
Q: Who is your market for those hotels? Are they families coming for a sports event? Or tourists wanting to get away from the crowds?
A: All of the above.
We were on the property working with DHHL and our president, almost 12 years ago now, the only zoned hotel use outside of Ko Olina west of the airport. We’ve always seen a need for focus-service hotels.
And the demand drivers for those are the kamaaina. It is the regional business person; there is a thriving business community out here.…
The military business traveler … we have people that wake up every morning and drive to Schofield and Tripler, and all that stuff …
Q: Neighbor island?
A: We’re getting everybody…. We have people visiting, coming back home, kids from school, maybe Mom and Dad have someone else in their room by now. We actually have UH-West Oahu utilizing us as a base for people visiting the campus …
The business community out here is much more diverse than people realize today. … But I think we’ll also get some tourists who want to stay outside of Waikiki. …
Q: Do you feel the mall is right-sized, has the right capacity for the demand out here?
A: It’s a constant balancing act, as a developer. We’d like to build something bigger, better, higher income-generating, but we have to be humble. We don’t want to outbuild for today’s market because that’s doing it for ego’s sake.
What we have is extreme amount of parking relative to the square footage we’ve developed in Phase 1; meaning, it’s the right balance.
We do have a lot higher per-person ridership in cars than we do on the mainland. You see on the mainland maybe one or two people max, per car, when on a site visit here, it’s almost three, 3-1/2, because people come and shop together. …
You don’t design your infrastructure for the biggest and baddest day of shopping ever, because if you did the rest of the year it would feel like a ghost town, to some extent. And land is at such a premium here, and we’re very thoughtful in the sense that we don’t want to overbuild these large, huge parking fields, just to have it. …
Q: Is the height of the shopping center going to scale up? Or is it going to stay low-rise?
A: Well, we have the ability. The property’s zoned up to 120 feet tall. What we have right now is a seven-story building (the hotel), six floors of rooms. We have to be careful on the scale of the property. We weren’t going to go up to 120 feet and build a little city on the Ewa plains.
But we have the ability over time — it’s a 65-year lease — to densify and go vertical. We’ve thought about it. We do want to add some office component over time, too. Because as the market matures, we are going to need more Class A office, and even some medical office. I don’t see anything going super high.
Q: In terms of the shops themselves?
A: I can see second story. We have one two-story in Phase 1; Phase 2 might have multiple stories. Maybe some subterranean parking. But humble scale.
Q: Wasn’t there talk about Ka Makana Alii ending up bigger than Pearlridge?
A: There’s been a lot of twists and turns on the messaging over the decade-plus of getting it here. We definitely are entitled and will be, over full development, larger than a Pearlridge. I don’t think we’ll ever scratch —
Q: Ala Moana?
A: No, no. For the sheer verticality and density of what they’ve done. There’s only one Ala Moana in the world. There really is. It’s one of the most unique properties. And we all covet it greatly. …
We’re not trying to do it from an ego standpoint. It’s the demand. And already in the first four weeks we see the demand is there, and it’s going to continue to grow.
And one of the things that’s going to happen that the retailers themselves … once the sales start coming in, they’re gonna go, “Oh, wow, West Oahu is its own market.” That’s going to get out nationally, and that’s going to get out internationally, and then we’ll start getting some of those stores.
And we’ve done a good job so far on getting first-to-Hawaii’s into KMA (Ka Makana Alii), to be different in all the other centers as well.
Q: For example, the first-in-Hawaii tenants?
A: There are subtle things, like Bath &Body, we’re the only one that has the “White Barn” store-in-store … We also have Lindbergh, b.young, G by Guess and countless others, including our hotel. This is the first Hampton in Hawaii.
And then you get an H&M, which is a very hot retailer worldwide. Having the second one on Oahu gives some distinction out here. We had some ladies in line; there were 1,000 people in line on grand-opening day, just to get into H&M.
