Kokua Market needs some kokua.
The natural foods store and cooperative in Moiliili is seeking help after suffering financial difficulties in recent months largely attributed to disruptions from a new neighboring property owner.
That neighbor, a 590-bed collegiate rental housing tower called Hale Mahana, opened in August. Normally, a big new base of potential customers moving in next door would be a good thing for a grocery store. But Kokua Market claims that traffic disruptions from construction and other negative effects from the tower have contributed to a crisis.
Jesse Cohen, the market’s general manager as of about a month ago, said it’s probable that the 47-year-old co-op will have to shut down.
“It’s pretty much that bad,” he said.
Trouble for Kokua Market isn’t entirely blamed on Hale Mahana. Bigger competitors Whole Foods Market and Down to Earth opening new stores in Kakaako several months ago also contributed to a “perfect storm” as described by the co-op.
Then there was an actual storm that dumped about five inches of floodwater into Kokua Market’s parking lot one day last month after a similar event in September, according to the co-op.
Such troubles have led to 20 percent fewer customers and average sales plunging by $1,000 a day since June, according to the market.
Inside the store, some items can’t be restocked in a timely manner because of the revenue drain.
“We’ve had to stretch,” Cohen said. “It’s hard to avoid negative feedback loops.”
Kokua Market established an online GoFundMe campaign Nov. 1 with a goal to raise $250,000. As of Tuesday contributors had committed about $14,000. The co-op has roughly 5,000 part-owners.
The company also plans to seek some relief from owners of Hale Mahana, which include the $31 billion investment fund Greystar Real Estate Partners, based in South Carolina.
Cohen said that since June contractors building the $110 million tower repeatedly blocked access to Kokua Market’s driveway with construction vehicles or by closing the only road to the market’s parking lot.
“It’s tantamount to closing down the access to our store,” he said. “People would just rather avoid it.”
Since the tower opened, Cohen said, customers of a Pieology store in the bottom of the new tower are using Kokua Market’s parking lot, and delivery vehicles regularly add to congestion fronting the market.
As for the rainstorm,
Cohen has videos of water gushing from two large drainpipes sticking out of Hale Mahana aimed at the street fronting Kokua Market’s parking lot.
Because of the situation with the tower, Cohen said the market will seek to join a lawsuit the market’s landlord filed against the tower owner last year.
Paul Menzies, CEO of
California-based Laconia Development, a firm that developed Hale Mahana with a partner since acquired by Greystar, said the tower’s owner wants good relationships with everybody in the community, and certainly with Kokua Market.
“Kokua Market is a great resource for the local community, including the residents of Hale Mahana,” Menzies said in a statement.
Menzies said that during construction no one from the market approached tower representatives claiming that work was hurting business. He added that the market’s parking lot had flooding problems before Hale Mahana was built, but also said the tower owner will review its stormwater drainage and make any
About ongoing road congestion, Menzies said a big issue has been Kokua Market’s landlord inhibiting
removal of utility poles that will allow full use of the road that the tower owner widened by five feet.
Cohen acknowledged that Kokua Market’s parking lot had chronic flooding issues because of problems with a drain in the parking lot, but said this was fixed and since then no flooding occurred until the rainstorm last month.
Part of the flooding issue also has to do with the street between Kokua Market and Hale Mahana. This street, Kahuna Lane, is owned by the market’s landlord and lacks storm drains. The road’s owner, The Malulani Group, had unsuccessfully sought for the tower developer to upgrade Kahuna Lane with drainage and other modern standard features.
Jorli Iwanaga, a market member and volunteer, said she was shocked to see the parking lot in roughly ankle-deep water last month.
“I couldn’t believe my eyes,” she said. “I said (to Cohen), ‘You have Venice outside your door.’”
Iwanaga said the financial situation for the market is sad. “We were doing so well for the first half of the year,” she said.
Dave Yarber, a Kokua Market member and vendor, said his Waimanalo business, which makes and supplies the market with Sky Kombucha and Hoku Coffee, has been affected by the customer and sales slowdown.
“For us as a vendor, it’s difficult because they’re like the store we started at,” Yarber said. “We really love them and have a real affinity for them as clients, but it’s tough. Our hope is that the co-op will turn around.”