One of the most prime retail corners in Waikiki — a site once filled with mock-up scenes of old Hawaii including a Matson passenger ship — is to be redeveloped for the third time in three decades.

Local real estate investment firm BlackSand Capital plans to remake the two-story retail complex in the base of a 15-story office tower at the corner of Kalakaua and Royal Hawaiian avenues after buying the entire property for $270 million last week.

B.J. Kobayashi, BlackSand chairman and CEO, said plans have yet to be drawn up but the 75,000 square feet of retail space over the next couple of years or so will be turned into something that reinvigorates the site in the middle of dense pedestrian tourist traffic.

“It’s really a shame that it’s all closed up,” he said. “Right now, it’s just a big hallway.”

The retail space, which long ago had been a Woolworth store, was dramatically transformed in 2001 by travel retailer DFS Group, which leased the space from the tower’s owner and spent $65 million creating a retail and entertainment experience with lifelike Hawaii imagery from the 1920s.

Dubbed “Waikiki Walk,” the space featured two levels of retail stores on either side of a walkway designed to resemble a nearly century old street amid mock-ups of Iolani Palace, the Moana Hotel, a giant hau tree, the Dillingham Transportation Building and a Honolulu Harbor pier next to the “Spirit of Aloha” passenger liner.

The ceiling of the complex was made to look like the sky, and turned from blue to orange at the top of each hour to simulate the sunset backed by an image of Diamond Head.

Six years later, however, the re-creation that could have fit well on the Las Vegas strip wasn’t delivering expected results, so DFS spent another $45 million converting the space into a modern layout of luxury retail boutiques.

Last year as retailers throughout Hawaii, especially in Waikiki, were reeling from coronavirus- related restrictions on store operations and tourism, DFS decided not to extend its lease for the space, which is makai of its longstanding flagship duty- free store in an adjacent building, according to Kobayashi.

Kobayashi said BlackSand does not intend to change the high-rise office portion of the building, which is roughly 90% occupied and was once known as the Nippon Shinpan Building after a former owner before being renamed the Waikiki Galleria Tower after the changes made by DFS.

“We are big believers in the Waikiki office market,” he said.

The office and retail property is one of several real estate investments BlackSand has made in Waikiki over the past decade.

The firm, formed in 2010, was a partner in acquiring and converting the Ohana Waikiki West Hotel into a Hilton Garden Inn, acquired a stake in the Maile Sky Court Hotel, and through a partnership acquired and then sold the King’s Village Shopping Center property now slated for development of a timeshare tower by Hilton Grand Vacations.