Hawaii Real Estate and Economy: May 2013

Friday, May 31, 2013

Hawaii Visitor Arrival Increased by 3.1 Percent in April 2013

According to a report issued by the Hawaii Tourism Authority, a total of 669,959 visitors visited Hawaii in April 2013, which represented a 3.1 percent increase from the same month a year prior. While any increase is welcome news to Hawaii’s economy, this was actually lower then what was expected, leaving industry analysts to reevaluate previous predictions and targets. Hawaii Tourism Authority’s vice president of brand management, David Uchiyama, stated, “Historically, April and May are soft months, so the fact that we’ve been able to pace ahead of previous years still is a good sign. It’s true that we aren’t to where we targeted, but I think we’ll see some pickup coming into summer. So for now I’m comfortable with the goals.”

Mike McCartney, president and CEO of the Hawaii Tourism Authority, added, “We will continue to see reductions in the average length of stay and per-person, per-day spending as visitors exercise caution in reaching their budgeted spending limits. We are also cognizant of airlines adjusting their routes to meet demand, resulting in reduced service to the Hawaiian Islands during the second half of the year.”

Source: Honolulu Star Advertiser, 5-31-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Secretary of Defense Chuck Hagel Discusses Military Spending Plans

Chuck Hagel, the new Secretary of Defense, met with Hawaii troops and answered a couple of questions regarding military spending plans and the federal budgets cuts that would affect the armed services. Hagel admitted that in order to trim defense spending, “we are looking at everything across the board.” However, Hagel added that the troops’ well being takes top priority when it comes to spending. Hagel stated, “It doesn’t make a difference how sophisticated your equipment is or anything else. If you don’t have good people, then you can’t keep good equipment.”

According to Hagel, the nation’s defense budget is approximately $500 billion a year, out of which $170 billion goes towards military pay and benefits. The Defense Department is requesting a 1 percent pay raise for service members of 2014. Hagel noted that there will be a re-balance of forces to the Pacific as “opportunities in the world are centered in the Pacific area.”

Alexander & Baldwin Inc. To Purchase Pearl Highlands Center

Alexander & Baldwin Inc. has announced that they will be buying the Pearl Highlands Center for $141.5 million. The purchase of the retail center would include the assumption of a $59.3 million mortgage and the transaction is expected to close by the end of 2013. The Pearl Highlands Center has approximately 415,000 sq ft of retail space and is anchored by Regal Theaters, Ross Dress for Less, 24 Hour Fitness and Sam’s Club. The company had purchased the Waianae Mall in January 2013 for $30 million and purchase the Napili Plaza on Maui for $19 million in May 2013. Alexander & Baldwin’s president and Chief Operating Officer, Chris Benjamin, stated, “The addition of Pearl Highlands will boost our total Hawaii commercial (real estate) square footage over the 2 million-square-foot mark, a 25 percent increase.”

St. Francis Plans to Convert Part of Liliha Hospital Into Skilled Nursing Facility

St. Francis Healthcare System of Hawaii has announced that they would like to convert three floors of the former Liliha hospital into a skilled nursing facility. According to company officials, it would cost approximately $10 million to create a 100-bed unit. A total of $4 million has been already donated by the Clarence T.C. Ching Foundation, who has been a long time supporter of St. Francis.

St. Francis has stated that they will be refocusing their mission to serve the older adult population of Hawaii. According to Health Trends Hawaii, one in five people will be 65 years or older by 2030. St. Francis plans to eventually add independent living, assisted living, and a memory care unit to the Liliha hospital. They also are planning to add skills-strengthening rooms and physical therapy rooms for their patients.

Ross Dress for Less to Replace Barnes & Noble Store at Kahala Mall

Kahala Mall has announced that a Ross Dress for Less Store will replace the Barnes & Noble store which is located on the rooftop parking deck. A Kahala Mall spokesperson stated, “We would have very much liked to have had Barnes and Noble remain as our tenant. Unfortunately their business model is no longer able to sustain itself and they had to make the difficult decision to not renew their lease here at Kahala Mall.” With the closure of their Kahala Mall location, Barnes & Noble will only have their Ala Moana Center location in Hawaii. Ross Stores Inc. entered the Hawaii market in 1993 and currently has a total of 15 stores in Hawaii. A total of 12 of these stores are located on Oahu, two stores a located on the Big Island of Hawaii and one store is located on Maui.

Kauai Beach Resort in Lihue Receives 14 Safety and Health Violations

The federal Occupational Safety and Health Administration has cited the Kauai Beach Resort in Lihue to a total of 14 safety and health violations. Out of the 14 violations, nine of them were considered to be serious, and involved failure to safely and properly store and label propane tanks, electrical wiring deficiencies and unsafe electrical work practices. Galem Lamke, the director of the Occupational Safety and Health Administration’s Honolulu Area office, noted that the majority of the violations were related to the resort’s maintenance department. The Kauai Beach Resort now has 15 business days to comply or contest the findings. The resort responded by stating, “We immediately addressed the items OSHA brought to our attention and will continue to diligently monitor all of our safety practices at Kauai Beach Resort.”

Thursday, May 30, 2013

Hokule’a Voyaging Canoe Prepares for Three Year Voyage

The traditional Hawaiian voyaging canoe, Hokule’a, is preparing for a 47,000 mile voyage which will send the crew to 28 countries around the world. The trip will begin a year from now in May 2014, and is scheduled to end three years later in June 2017. However, prior to setting out on this epic journey, over 400 potential crew members will be training around the Hawaiian Islands for the next year.

The first historic voyage of the Hokule’a occurred in 1976 when the double-hulled canoe traveled from Hawaii to Tahiti using only traditional navigation techniques which included using the stats, winds, waves and birds. Since then the Hokule’a has gone on other trips, but nothing as long or as ambitious as this upcoming three year journey.

Nainoa Thompson, president of the Polynesian Voyaging Society, stated, “We need to learn how to take care of the planet. It’s our home, but more importantly, it’s our children’s home. The voyage of Hokule‘a is about exploration, discovery and a coming together of the diverse many so we can learn together to work toward responsible living on this island earth and then teach it to our children for their future.”

For additional information or to follow their exploits, goto www.Hokulea.org

Source: Honolulu Star Advertiser, 5-30-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Hawaii’s Elderly Among Nation’s Healthiest

According to a report commissioned by the United Health Foundation, Hawaii ranked 6th in the nation in terms of the health of people 65 years or older. The study, called America’s Health Rankings Senior Report: A Call to Action, researched senior’s behavior, clinical care, health outcomes, communities, and environment measures. Hawaii had the lowest rates in the nation in terms of obesity, hip fractures and preventable hospitalization, and also scored well on low smoking rates and high physical activity. The healthiest state for seniors in the country was Minnesota while Mississippi came in last.

Chief medical officer of the UnitedHealthcare Community Plan of Hawaii, Dr. Ron Fujimoto, commented, “This is the first study of its kind focusing on the senior population, those 65 and older. The objective of this report is to have everyone look at this population and be advocates for improving the health of this group. This segment of the population is growing rapidly. It’s a pretty compelling population to study. I was very encouraged by the fact that we are in the Top 10 and I know we could be in the Top Five, if we look at this report and start understanding better where we can put our resources and energies.”

Hawaiian Airlines Finalizes Deal to Buy Six New Airbus A330 Airplanes

Hawaiian Airlines has announced that they have finalized a deal to purchase six new Airbus A330 aircraft. Hawaiian Airlines sold $444.5 million in certificates with a fixed interest rate of 3.9 percent or 4.95 percent based upon the class of certificate. The loan will be secured by the aircraft. The last loan will be paid off by Hawaiian Airlines in 2026 at which the planes would belong solely to Hawaiian.

Chief Financial Officer for Hawaiian Airline, Scott Topping, stated, “This financing represents a significant landmark for Hawaiian and we are very pleased with the results. The offering opens a significant new source of future capital for Hawaiian and reflects our financial strength, the confidence that capital market investors have in our strategy and the enduring value of our investment in the Airbus aircraft.”

Wednesday, May 29, 2013

Construction Industry Expected to Improve in Next Fiscal Year

The state Council on Revenues announced that the growth forecast for this fiscal year (which ends on June 30th) remains unchanged at 6.7 percent, but increased projections for the next fiscal year to 8 percent thanks to predicted improvements in the construction industry. Previously, the Council on Revenues had predicted a 7.3 percent increase in the 2014 fiscal year, and this updated forecast would mean an addition $37 million in revenue for the state.

With several new housing and condominium projects being presented in Kakaako and central Oahu, as well as the expected resumption of the $5.26 billion Honolulu Rail Project, the state Council of Revenues feels that the construction industry will really pick up over the next few years. Governor Neil Abercrombie commented, “Our economy is strong and appears to be getting stronger. Hawaii continues to lead the U.S. amongst states with significant revenue growth possibilities. We expect to see continued improvement in the construction industry, real estate market, agriculture and small business activity as well the hospitality industry.”

Source: Honolulu Star Advertiser, 5-29-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Skybar Waikiki Will Open in Spring of 2014 at Waikiki Business Plaza

Owners Leighton Mau, Alika Mau, Darren Seu and Kainoa Akina have announced that they will be opening a new lounge and bar on the 19th floor of the Waikiki Business Plaza in the Spring of 2014. The 9,000 square-foot property will be called Skybar Waikiki, and will have unobstructed views of Diamond Head Crater and Waikiki Beach. The owners stated that there will be an open-air lounge and two bars, one indoors and one outdoors at the property. Akina commented, “The modernization project to develop the Waikiki Business Plaza and Waikiki Shopping Plaza as a premier shopping and entertainment venue will be complemented by Skybar Waikiki.”

Kakaako Real Estate – 677 Ala Moana to Be Renovated

Redico, the owner of 677 Ala Moana, has announced that company plans to spend $14 million to renovate the 12-story building. Formerly known as the Gold Bond Building, 677 Ala Moana is primarily and office building whose land lease is owned by Kamehameha Schools. Redico was asked by Kamehameha Schools to change the aesthetics of the building to assimilate to the new master-planned redevelopment of Kakaako. Paul Quintiliani, the director of the commercial real estate division at Kamehameha Schools, stated, “They have a great new design and redevelopment plan. We are happy to extend a ground lease with a building owner willing to invest money to improve this community asset.” The renovation will begin later this year and should be completed by the end of 2014. The architect will be MGA Architecture, and the general contractor will be Swinerton Builders.

Tuesday, May 28, 2013

Electrical Rates Increase Slightly to Fund Wind Energy Research

Oahu residents will have to pay an average of 13 cents more per month for the next three years to pay for a study on wind energy that was conducted in 2009 and 2010 by the Hawaiian Electric Company. The research project, called “Big Wind”, was on how to generate wind energy on the neighbor islands and then send it to Oahu via undersea cables. According to the Hawaiian Electric Company, the Public Utilities Commission has given permission last week to collect $4.4 million from rate payers. HECO stated, “These are the core planning studies that were necessary to assess both the technical and economic feasibility of the Big Wind Projects and requirements for the Oahu transmission lines and facilities needed to interconnect undersea cables delivering power from the Big Wind Projects to Oahu.”

However many question if the research was worth it, as nothing has materialized from the studies as of yet. A wind farm project on Molokai was dropped after two developers were unable to win support from the local community. Another wind project on Lanai is still up in the air with developer Castle and Cooke retaining the rights to develop a wind farm at a later date.

Source: Honolulu Star Advertiser, 5-28-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Hawaii Convention Center to Get New Management

State officials have decided to change the management team of the Hawaii Convention Center and are currently reviewing proposals by four firms who are interested in taking over. The center was built 15 years ago in 1998, and since then has significantly under-performed and often failed to meet expectations of increasing business travel to the state. In fact, in 2012, only 5 percent of Hawaii’s visitor arrivals came to the islands for business. Mike McCartney, the president and CEO of the Hawaii Tourism Authority, stated, “In the next few years, I’d like to see our overall meetings, conventions and incentives business grow to 10 percent and our visitor spending grow to around $1 billion.” The next contract will run for five years from January 1, 2014 to December 31, 2018.

Monday, May 27, 2013

Kauai Clams Receives Approval from State Department of Health

Kauai Clams has received approval from the state of Hawaii’s Department of Health to be able to farm and sell shellfish. Because of the high risk of foodborne disease, obtaining the necessary permits is actually a lengthy process and the Department of Health has to assure that high level of purity in the water where the clams are raised. In fact, Kauai clams is the first Hawaii operation in 26 years to receive approval to farm and sell shellfish. Kauai Clams hopes begin selling clams and oysters to various markets, restaurants and hotels to Kauai and around the state by the end of summer.

Source: Honolulu Star Advertiser, 5-27-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Brick Oven Pizza Store Coming to Kaneohe Bay Shopping Center

The Kaneohe Bay Shopping Center, located directly across the street from Kamehameha Highway, will be getting a Brick Oven Pizza restaurant. The Kauai based company currently has two locations of Kauai and one location in Kapolei on Oahu. According to the president of Brick Oven Pizza, Corey Aguano, the Kaneohe location will accommodate approximately 100 people and would have a full bar. Tentatively Aguano is hoping to open “by the end of summer” or possibly in the middle of August. People interested in employment may apply on the company website at http://brickovenpizzahi.com/

Sunday, May 26, 2013

University of Hawaii Athletic Director Hopes to Improve Facilities

Ben Jay, the recently appointed new athletic director at the University of Hawaii, is requesting some key renovations and improvements for the sports facilities at the school. The board of regents had previously allocated approximately $12 million in the budget for projects, but the additional wish list would cost an additional $10 to $30 million. Jay stated, “They are the kind of things that (prospective) students come here and take a look at. They are what we recruit to. If we want to bring in great recruits, we have to pay attention to our facilities. This is not just about athletics. I mean, I think people around the university and on the campus know we have to deal with some facility issues, not just in athletics, but on the academics side (of campus). That has been the focus of what Tom has said as well. We are speaking the same language when it comes to that.” Jay added that the “(facilities) don’t have to be fancy. They just have to be functional, efficient and clean. That’s been my point. It was the same emphasis we had at Ohio State, where we were going to provide (athletes) what they needed. It didn’t have to be the Taj Mahal.”

Source: Honolulu Star Advertiser, 5-26-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Hawaii Employers Pay More To Help Fund Unemployment Trust Fund

According to the state Department of Labor and Industrial Relations, employers in Hawaii will pay an average of $980 per worker into the Unemployment Trust Fund in 2013. Considering that employers were paying approximately $100 per work as recently as 2009, this has created a lot of concerns by both large and small companies in the state.

In 2008 and 2009, there was a surge of unemployment insurance claims across the state due to the recession. The state government was forced to make several aggressive tax increases in 2010 after the unemployment trust fund ran out of money. At the end of 2012, the state was able to raise about $104 million into the fund. The state’s Unemployment Trust Fund is projected to take in $372 million in taxes and earn approximately $8 million in interest in 2013, while paying $198 million in benefits. This will mean that the state should have $285 million in the fund by the end of 2013. However, this is still short of the “adequate reserve level” of $384 million.

State Senator Sam Slom commented that the state legislature needs to do more to provide some relief to businesses in Hawaii. Slom stated, “Employers have been led to believe that the Legislature is looking out for them. We already have one of the most unfriendly business climates in the country. The people who talk about raising the minimum wage and raising payroll taxes have never run a business.”

Jackson Chameleon Found on Kauai

A 7 inch long, not including the tail, male Jackson chameleon was found on the island Kauai, causing concern from state and county officials. While the Jackson chameleon can be found on the island of Oahu, they are prohibited from being on the neighbor islands. The chameleon poses a threat to native insects and snails and may significantly damage the native ecosystem if remained unchecked. To report a Jackson Chameleon on Kauai, goto www.reportapest.org or call (808) 643-7378.

Saturday, May 25, 2013

Department of Education Faces $7 Million Shortfall in Operating Budget

The Department of Education is facing a $7 million shortfall in their operating budget. Amy Kunz, the DOE Chief Financial Officer, stated, “The department is going through a major process to relook at all items, prioritize them, determine how we move forward and how we fund them.” Kunz did note that the shortfall isn’t substantial as compared to the $1.39 billion overall budget, but did note that some programs may have to be cut or trimmed down because of funding.

Kathryn Matayoshi, the Schools Superintendent, added, “We are very clear that the strategic plan is our focus, it’s our priority. So when we go through this exercise, we’re going to try to figure out how we’re going to manage the budget that we have. We will find a way, within the constraints that we have. It may be painful, but certainly, having a common vision, common strategic plan, common measures with the board assures that the alignment, when it comes to the allocation of resources, is clear.”

Source: Honolulu Star Advertiser, 5-25-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Maui Real Estate – Sales Data for April 2013

Source: Realtors Association of Maui

Single Family Home Sales for the Island of Maui
April 2013 – 77 Homes Sold – $500,000 Median Price
April 2012 – 79 Homes Sold – $469,000 Median Price

Condominium Sales for the Island of Maui
April 2013 – 143 Condos Sold – $370,000 Median Price
April 2012 – 129 Condos Sold – $399,000 Median Price

Friday, May 24, 2013

Neighbor Islands’ Economies Improving

According to a report released by the University of Hawaii Economic Research Organization (UHERO), the neighbor islands’ economies have definitely shown signs of improvement, which will help propel the entire state’s economic expansion through at least 2015. The report stated, “Oahu continues to be further along in recovery, but the neighbor islands are catching up fast. This year, economic growth will quicken with an impetus from construction, which has turned the corner and is poised for a strong pickup in activity. The broadening recovery together with modest inflation will drive growth in real (inflation-adjusted) incomes across the counties over the next several years.”

UHERO predicts a 6.3 percent increase in visitor arrivals for the island of Oahu. However, they predict even higher increases from the neighbor islands. Kauai is forecast to have an 8.9 percent increase in arrivals, the Big Island of Hawaii 8.2 percent and Maui approximately 7.7 percent. It should be noted however, that the neighbor islands tourism industries suffered significantly more than Oahu did during the last six years of recession and that their numbers still lag far behind that of Oahu.

Source: Honolulu Star Advertiser, 5-24-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Inter-island Shipping Down 3.9 Percent in First Quarter of 2013

According to a report released by Young Brothers Ltd., the main inter-island shipping company in the state of Hawaii, cargo shipments between Honolulu and the six neighbor island ports decreased by 3.9 percent during the first quarter of 2013 as compared to the same period a year ago. Shipments decreased by 12.3 percent to Kawaihae Harbor on the Big Island of Hawaii, by 6 percent at Hilo Harbor also on the Big Island, and by 5.8 percent on Kahului Harbor on Maui. Increases were seen at Nawiliwili Harbor on Kauai (3.1 percent), Kaunakakai Harbor on Molokai (2.2 percent) and Kaumalapau Harbor on Lanai at 28.5 percent. President of Young Brothers, Glenn Hong stated, “It’s disappointing to start the year with a decline. Nevertheless, it’s a continuation of the volatility we’ve experienced in quarterly comparisons of intrastate cargo volumes over the last few years. The trend has been sideways — a slight up quarter followed by a dip. We believe that some local businesses, particularly those on the neighbor islands, are still being very cautious.”

Thursday, May 23, 2013

700 Foot Residential Tower Could Be Built at Blaisdell Center

The Hawaii Community Development Authority, the state agency responsible for regulating the development of Kakaako, is suggesting that that city allow a developer to build a 700-foot residential tower where the Neal S. Blaisdell Center currently exists. In exchange for allowing a developer to build a residential tower, the developer would provide the city with a new preforming arts facility, public concert hall, and events center. The Neal S. Blaisdell Center was originally built in 1964 and is beginning to show its age despite its last major renovation and expansion in 1994. Executive director for the HCDA, Anthony Ching, stated, “”This is a perfect opportunity, should the city take it.”

For additional information on what is happening in Kakaako, please go to: dbedt.hawaii.gov/hcda

Source: Honolulu Star Advertiser, 5-23-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Kaiser Permanente Hawaii May Purchase Part of Moanalua Golf Course

Kaiser Permanente Hawaii is currently in discussion with Moanalua Golf Club to purchase approximately 10 acres of the golf course which is located next to the Kaiser Permanente Poanalua medical Center and Clinic. Spokeswoman for Kaiser, Laura Lott, stated, “We plan to be in Hawaii for decades and decades to come so who can say what the needs will be in the future. We would continue to lease back the land to the golf club for use until they don’t need it anymore.” Eventually, Kaiser may decide to expand their Moanalua hospital and could use the additional land.

According to Moanalua Golf Club President, Stacy Higa, the club is under dire financial circumstances. Higa stated, “The only thing that’s motivating this is financially our club has been flat. It’s hard to attract new members. Everybody is just struggling. Revenue’s been on the decline the last few years. Part of the board’s willingness to even entertain this proposal is the opportunity to renovate and upgrade the facilities with the possibility to relieve some of our long-term obligations or debt. It’s a very complex deal. There will be some reconfiguration. Like anything else, you can’t take 10 acres out of a golf course and make it that much less. You have to do some redesigning. The board of directors of the golf club has looked at this as an opportunity to come up with a plan that’ll be beneficial to both Moanalua Golf Club and to Kaiser.” The members of the golf club will vote on this issue.

Wednesday, May 22, 2013

Howard Hughes Corporation Announces Three More Condominiums in Kakaako Neighborhood

The Howard Hughes Corporation has announced that they will be building three new condominium towers in Kakaako, a total of 900 units, at the same time. According to the company’s master plan, this will be part of the first phase of a total 22 towers that we be built over the next 15 years in Kakaako. The Howard Hughes Corp. is planning on spending a total of $7.5 billion to build a total of up to 22 towers with up to 4,300 residential units on the 60-acre parcel. The company also plans to double the amount of retail space in the neighborhood and add additional restaurants and entertainment options. Senior vice president in Hawaii for the Howard Hughes Corp., David Striph, stated, “The pent-up demand, we think, is great.”

Tower 1 will be located on Ward Avenue between Halekauwila and Ilaniwai streets. This building will be moderately priced and have approximately 415 units. Tower 2 will be located directly across on the ocean side of the Ward theater complex. This building would have unobstructed views of Ala Moana Beach Park and Kewalo Basin and will have have approximately 200 units. Tower 2 will be the most luxurious of these three towers. Finally, Tower 3 will be built where the Pier 1 Imports store is currently located. This tower will have about 300 units and will be priced somewhere in between Tower 1 and Tower 2.

Provided that the Hawaii Community Development Authority, the state agency overseeing the development of Kakaako, gives the necessary approvals, the there new towers will break ground in 2014 and be completed approximately 2 years later in 2016.

Source: Honolulu Star Advertiser, 5-22-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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May's Electrical Rates Lowest in 2013 for State of Hawaii

According to a report released by the Hawaiian Electric Company, electrical rates declined to 31.8 cents per kilowatt-hour in May. This is the lowest rate that residents of the island of Oahu has seen in 2013. The neighbor islands also experienced rate declines. Maui Electric Company charged their clients 37.1 cents per kilowatt-hour. Big Island of Hawaii customers paid 39.3 cents per kilowatt-hour. Kauai residents paid 41.9 cents per kilowatt-hour. Hawaii has the highest electrical rates in the nation. According to the Energy Information Agency, the national average in February 2013 was 11.61 cents per kilowatt-hour.

Less Credit Card Debt for Hawaii Residents

According to a report issued by TransUnion, a credit reporting agency, the average customer in Hawaii carried a credit card balance of $4,978 during the first quarter of 2013. This represented a 2.3 percent decrease from the same period a year prior. More importantly, only 0.47 percent of customers were 90 days or more delinquent on their credit card payments, a decrease from the 0.54 percent during the first quarter of 2012. Local economists feel encouraged by this slight progress and feel that it is a sign that Hawaii’s economy is slowly improving.

Source: Honolulu Star Advertiser, 5-22-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Tuesday, May 21, 2013

Howard Hughes Corporation to Announce Three New Residential High Rises in Kakaako

The Howard Hughes Corporation will be announcing shortly plans to build three new residential high-rise condominiums in Kakaako. Hughes Corp owns approximately 60-acres of land in the Ward Centers area in Kakaako. They have just recently applied for building permits from the Hawaii Community Development Authority, which is the state agency regulating development in the area. The Hughes Corp has an approved master plan which allows their company to build up to 4,300 residential units over the next 15 years. According to past press release, the master plan includes building 22 high-rise towers and doubling the existing retail, dining and entertainment venues that currently exist at the Ward Centers. It is estimated that it would cost the Hughes Corp approximately $7.5 billion to complete this massive undertaking.

Tentatively, it appears that these three towers will be located on the parking lot on the ocean side directly across from the Ward theater complex, on the site where the Pier 1 Imports currently occupies, and on an area on Ward Avenue currently occupied by the Kanpai Bar and Grill.

Source: Honolulu Star Advertiser, 5-21-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Tourism Industry Hopes to Attract More Business Meetings

In 2009, AIG Insurance Company received a total of $85 billion from the federal government in the form of a massive bailout to keep the company from going bankrupt. Shortly thereafter, AIG officials were seen spending hundreds of thousands of dollars on events like overseas hunting trips, lavish conferences, and wild golf outings. Federal lawmakers then warned large companies who were receiving government loans not to engage in frivolous travel if they wanted to continue to see federal funding. This lead to a 20 percent loss of business meetings, conventions and incentives business to places like Hawaii, since companies did not want to give the illusion of going to an exotic and fun leisure destination.

The Hawaii Tourism Authority estimates that due to what is now being called the “AIG effect”, the state of Hawaii lost approximately $97.6 million in revenue. Over the past few years, the visitor industry has been working hard to defend Hawaii’s reputation as serious place do to business meetings. President and CEO of the Hawaii Tourism Authority, Mike McCartney, stated, “Our unique culture, the aloha spirit of our people and the beauty of our islands differentiates us from other destinations, making the Hawaiian Islands an ideal place for business and leisure. We have a diverse array of facilities and infrastructure and a proven track record as a business host for high-level meetings.”

All Passengers in Automobiles Must Wear Seat Belts in Hawaii

Hawaii Governor Neil Abercrombie signed into law a new traffic safety bill that requires all passengers riding in an automobile to wear seat belts. Previously, the law required that only occupants in the front seats and minors in the back seats had to wear seat belts or child safety seats. Adults previously had the option of not wearing a seat belt in the back seat. However, the newly amended law means that everyone, regardless of age or position in the car, must buckle up. Abercrombie stated, “This measure closes the gap in protecting all passengers riding in a motor vehicle.”

Governor Abercrombie also signed into law House Bill 980, which bans the use of all handheld electronic devices while driving in the State of Hawaii. Adults may use hands-free devices, such as Bluetooth headsets, but drivers under the age of 18 may not. Different counties around the state had different laws and terminology regarding the use of electronic devices. Abercrombie added, “While all counties have some form of a distracted driving ordinance in place, this measure establishes a state law that creates consistent requirements across all counties for the use of mobile electronic devices while driving and will simplify enforcement.”

Monday, May 20, 2013

Honolulu Rail Project – Senator Schatz Meets with New Federal Transportation Secretary

United States Senator Brian Schatz has met with Anthony Foxx, who will become the new federal Transportation Secretary. The previous Transportation Secretary, Ray LaHood, promised to provide the Honolulu Rail Project with $1.55 billion in federal funding, and Schatz stated that he just wanted confirm Foxx’s support for the project. Following his meeting with Foxx, Schatz stated, “There’s no change in policy from one secretary to the other. They’re going to continue to be supportive.”

Source: Honolulu Star Advertiser, 5-20-2013, www.staradvertiser.com
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City Budget Struggles to Become Balanced

Honolulu Mayor Kirk Caldwell has warned the Honolulu City Council that either revenue would have to be increased or spending cut be made in order to balance the city’s $2.09 billion operating budget. Caldwell’s administration believes that there is a $67.5 million gap in the budget and the Mayor is suggesting either an increase in property taxes or bus fares to bridge the problem. The City Council had previously rejected Caldwell’s suggestion to increase the gas tax by 5 cents per gallon, which would have raised an estimated $15 million in revenue.

City Council Budget Chairwoman Ann Kobayashi responded by stating that the Council had a balanced budget in the works and that it will be presented shortly. Kobayashi stated, “We’re certainly not going to hurt anyone. We’re not cutting services, and we’re not going to raise property taxes or bus fares at this late stage. We wouldn’t be able to do that without holding hearings.”

Kihei High School on Maui Will Cost $130 Million to Build

State budget officials have given final approval to build the new Kihei High School on Maui at an estimated cost of $130 million. Construction is expected to begin sometime next year and would take approximately two years to complete. The facility will initially have 800 students during the first year and will eventually have a total of 1,650 students. The school will be built on 77 acres of vacant agricultural land next to the Piilani Highway.

15th Annual Lantern Floating Ceremony at Ala Moana Beach Park

The 15th annual lantern floating ceremony will be taking place at Ala Moana Beach Park this Memorial Day. This year’s theme is “Many Rivers, One Ocean,” and more than 5,000 candle-lit lanterns will be set afloat at Magic Island. The lanterns are lit in remembrance of deceased loved ones or as a symbolic prayer for a harmonious and peaceful future. Visitors and residents may obtain a free lantern to write personal messages on, or fill out forms that would be placed in collective remembrance lanterns. The event will begin at 6 p.m. and is expected to draw about 40,000 residents and visitors. For additional information go to: www.lanternfloatinghawaii.com

Sunday, May 19, 2013

Plans for Aloha Kai Tower at YMCA of Honolulu Upsets Neighbors

The YMCA of Honolulu is located on Atkinson Drive directly across from the Ala Moana Shopping Center. In April 2012, the YMCA decided to sell part of their property to MB Acquisitions, a San Francisco developer who hoped to build a 120-unit condominium behind the current YMCA. In exchange, MB Acquisitions would provide the YMCA a completely remodeled facility with state of the art equipment.

MB Acquisitions has requested a zoning change from the Department of Planning and Permitting to allow them to build a 120-unit tower, tentatively named Aloha Kai Tower, higher then the current restrictions. Currently the property is zoned A-2, or medium-density apartment district, which allows a maximum height of 150 feet. However, MB Acquisitions would like for the property to be changed to AMX-3 zoning, or high-density apartment mixed-use, which would allow for a 350 foot tall tower.

Residents of the surrounding buildings have filed protest with the Department of Planning and Permitting and have argued that MB Acquisitions did not properly notified them of their plans. Under city law, an applicant filing for a zoning change must in good faith notify all property owners within 300 feet of the site. MB Acquisition argued that all of the surrounding condominiums were notified, and it is not their fault if individual condominium unit owners were not informed.

Source: Honolulu Star Advertiser, 5-19-2013, www.staradvertiser.com
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Saturday, May 18, 2013

Bloomingdale’s to Replace Sears in Ala Moana Shopping Center

Ala Moana Shopping Center has announced that Bloomingdale’s will replace Sears as the anchor tenant on the western side of the shopping mall in the fall of 2015. The luxury department store is expected to employ 250 people in their new 167,000 sq ft location, that will be completely redeveloped as part of the mall owner General Growth Properties’ $572.4 million redevelopment plan. Jim Sluzewski, the Bloomingdale’s spokesman, stated, “We are making this store decision now because of the great opportunity to be part of the redevelopment of Ala Moana, one of the very best shopping centers in the United States. It will allow Bloomingdale’s to serve new customers, both Hawaii residents and visitors from around the world.”

Chairman and CEO of Bloomingdale’s, Michael Gould, added, “It is a beautiful open-air shopping center that is a recognized destination not only for local customers from the Hawaiian islands, but also for visitors from the U.S. mainland, Asia and worldwide. In Hawaii, we will offer global customers the unique Bloomingdale’s sense of contemporary style, as well as the attentive service that sets us apart.”

According to Ala Moana Shopping Center’s press release, the largest mall in Hawaii gets approximately 42 million shopper visits per year.

Source: Honolulu Star Advertiser, 5-18-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Castle Foundation To Sell 38-Acre Town Center in Kailua

The Harold K. L. Castle Foundation has announced that they will be selling a real estate portfolio which will include a total of 600 acre of land including 38-acres in the heart of Kailua. The 38-acre town center in Kailua includes all of the land under the Foodland, Safeway, Whole Foods, Times, Longs Drugs, and Macy’s. The other holdings include the land under the Kaimuki Shopping Center, Windward City Shopping Center, Pali Palms Plaza, and land in Florida, Alabama, California and Arizona. No specific price was mentioned, but when the Castle Foundation valued its assets in 2011, they came up with a value of $150 million, which included all of their real estate holdings and other investments.

The Castle Foundation hopes that the sale would help generate a big infusion of cash funds, which they will in turn use to fund grants to nonprofits that benefit Hawaii residents. Founder Harold Kainalu Long Castle purchase 9,500 acres of land in Kailua in 1917 and helped establish the town of Kailua by donating land for churches, Castle Hospital, schools including Castle High School and Hawaii Loa College, and the land that became Marine Corps Base Hawaii. Castle passed away in 1967 and his will donated most of his real estate holdings to the Castle Foundation. To date, the foundation has awarded $176 million in grants.

Demolition and Reconstruction Begins for Queen’s Medical Center West Oahu

Queen’s Health System has announced that demolition will begin immediately at the former Hawaii Medical Center in Ewa. Queen’s will spend $70 million to rebuild and refurnish the facility, which will be renamed as Queen’s Medical Center, West Oahu. Senior vice president of Queen’s West Oahu, Susan Murray, stated, “This really is opening a brand-new Queen’s Medical Center West Oahu. It will look and feel different than it ever did before. It will have very much the look and feel of the Queen’s Medical Center downtown.”

The new facility will have a total of 23 emergency rooms and four operating rooms, a significant increase from the 10 emergency room and two operating rooms the the Hawaii Medical Center had. They will also add an intensive care unit, a diagnostic imaging department, and gynecology services. Queens expects to hire 400 employees initially and have between 60 and 80 doctors there in the facility.

Energy Expert Hired to Make Lanai Sustainable

Director of Strategic Energy Initiatives at the University of California, San Diego, Byron Washom, has been hired by Lanai Resorts LLC to help to make Lanai completely sustainable in terms of renewable energy and ocean water desalination. Lanai Resorts, which is owned in its entirety by billionaire Larry Ellison, issued a statement that Washom will, “Lead a new initiative to transform the Hawaiian island of Lanai into a model for sustainable energy.” Washom will oversee a development to make all of Lanai’s energy consumption renewable and help to develop a desalination plan that will help to augment the island’s fresh water supply.

When billion Larry Ellison purchased 97 percent of Lanai in June 2012, one of the plans that was announced was to ensure a sustainable future for its residents. Ellison also purchased Island Air in February 2013 to help with transportation to and from Lanai.

Friday, May 17, 2013

Homeless Population on Oahu Increases Significantly

According to the latest Homeless Point-in-Time Count, there were a total of 4,556 homeless people on the island of Oahu in January 2013, which represented a 4.7 percent increase from the previous year. More pressing for state lawmakers is the fact that the number of homeless living on the street increased to 1,465 people, an 11 percent jump from the same month in 2012. These findings reverse the trend set during the previous two years that showed the number of homeless were decreasing on Oahu.

State homeless coordinator Colin Kippen stated that he hopes that this study would help lawmakers to identify what needs to be done to help to end homelessness. Kippen added, “One of the things that this report screams out is that we have a lot to do and the Housing First collaboration with the city is really the right approach. If everyone went into shelter, you’d see a reduction in our unsheltered population. We have to look at getting people into a more stable situation as quickly as possible.”

Source: Honolulu Star Advertiser, 5-17-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Kukui Grove Center Sears on Kauai to Close Its Doors

Sears Holdings has announced that they will be closing one of its stores located at the Kukui Grove Center on the island of Kauai. Approximately 41 employees will be laid off by the end of July, though affected workers are encouraged to apply for positions at other Kmart or Sears stores. Company spokesman Howard Riefs stated, “As a part of the ordinary course of business, we close stores for a variety of reasons. This store is being closed because the lease was not renewed. The store closures are part of a series of actions we’re taking to reduce ongoing expenses, adjust our asset base and accelerate the transformation of our business model.”

Unemployment Rate for Hawaii Drops to 4.9 Percent in March 2013

According to the state of Hawaii’s Department of Labor and Industrial Relations, the state of Hawaii’s unemployment rate dropped to 4.9 percent in March 2013. The last time the state’s jobless rate was this low was in October 2008. While the state should be very happy about this positive news, economist Lawrence “Bill” Boyd from the Center of Labor Education and Research at the University of Hawaii at West Oahu notes, “We’re still feeling the lingering effects of the recession. Full employment in Hawaii is around 3 percent. That’s a number we need to be shooting for.”

Honolulu County had an unemployment rate of 3.9 percent. Maui County posted a 5.4 percent unemployment rate. Kauai Count had a 5.7 percent unemployment rate and Hawaii County (Big Island of Hawaii) had a 6.6 percent unemployment rate. The national unemployment rate was 7.5 percent in April 2013.

Thursday, May 16, 2013

Hawaii Homeless Situation – U.S. District Judge to Rule on Encampment of Sidewalks

(de)Occupy Honolulu members have been camping on sidewalks near Thomas Square near downtown Honolulu, and are protesting a wide range of government policies including the state and city’s stance on homelessness and other perceived social injustices. About a year ago, the city created a new law which allowed the city to seize tents and other personal property that had been left on the sidewalk after they had been tagged for a period of 24 hours. This created a cat-and-mouse game where (de)Occupy members took removed items that were tagged by city officials and prior to the 24 hour period, replaced them with similar items.

The (de)Occupy Honolulu organization has filed a lawsuit against the city that alleges that the law violates their First Amendment right of free speech and does not provide “due process” before seizing and destroying property. The city is supposed to store any confiscated property for 30 days, allowing the property owner to puck it up after satisfactory proof of ownership. (de)Occupy Honolulu argues that some of the items were burned and thrown away immediately. On February 22, the Honolulu city attorneys filed the following statement in court: “This case is not about the homeless. This case is about a mixed bag of self-absorbed social protesters — recent mainland transplants — who have seen fit to pitch their tents, invoke King Kamehameha’s law, and drag bulky item pickup junk furniture and other personal property on the sidewalk fronting one of Honolulu’s most historic and culturally significant public parks.”

U.S. District Judge J. Michael Seabright is scheduled to hear both sides in a preliminary hearing on Friday.

Source: Honolulu Star Advertiser, 5-16-2013, www.staradvertiser.com
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Increased Number of Recruiters at Job Fair

The WorkForce job fair is held three times a year at the Blaisdell Center. In the most recent job fair, a total of 171 employers attended, leading economic experts to believe that there is continued strengthening in the labor market of Hawaii. At the previous WorkForce job fair held in January, there were only 150 potential employers. The number of job seekers remained unchanged at approximately 3,500 people. Beth Busch, executive director of WorkForce, stated, “Some of this is trickle-down from the increases in tourism that we’ve been seeing for months. Why weren’t employers hiring before? They were still kind of scared having been through that recession. When the economy started improving they were thinking ‘What if we hire a bunch more people, what if it was a blip?’ Well now I think they’ve figured it out. It’s not a blip. This is the real thing. So they’re looking to hire.”

One of the biggest new recruiters was Lawson Station, a Japan-based convenience store. Lawson has already opened two stores in Waikiki and has announced that they will open another 20 to 30 stores in Hawaii within the next three years. Lawson plans to hire between 20 and 30 employees for each store.

Wednesday, May 15, 2013

Honolulu Rail Project - Artists Sought To Create Hawaiian-Themed Work

The Honolulu Authority for Rapid Transportation has officially started their search for artists to create Hawaiian-themed artwork to help decorate the 21 rail stations of the Honolulu Rail Project. According to officials, HART has set aside a total of $5 million to obtain 23 to 25 works of art. The budget for each piece will range from $125,000 to $450,000 based upon what the piece entails, the size, the time spent to create the piece, and the complexity of the work. Honolulu Mayor Kirk Caldwell stated, "For me, building rail better includes making sure we have great art in our stations."

The search is open to artists from around the world. If you, or someone you know is interested in this project, please go to www.callforentry.org or send an email to transitmailbox@honolulu.gov The deadline to apply is 7:59 PM on Thursday, June 20, 2013

Source: Honolulu Star Advertiser, 5-15-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Tuesday, May 14, 2013

International Waikiki Hula Conference

The International Waikiki Hula Conference will be holding events throughout this weekend in Waikiki and the Hawaii Convention Center. The event, sponsored by the Waikiki Improvement Association draws addendees and spectators from throughout the state of Hawaii, the mainland United States, Japan, Taiwan, China and Canada. According to event officials, participants can learn about modern and ancient hula, chants, history, costume, lei making, Hawaiian language, songs, and music. There will be over 40 of Hawaii’s top kumu hula (master hula teachers) who will be participating in the conference, and together they will put on 10 shows throughout Waikiki. Kumu hula Kapiolani Ha’o stated, “I love to see the tears of happiness on the faces of these dancers when they are done and you see that they have learned hula and they understand it. They are so thankful to feel what we in Hawaii feel.” For additional information please visit www.Waikikihulaconference.com or call 923-1094.

Source: Honolulu Star Advertiser, 5-14-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Monday, May 13, 2013

Hawaii Affordable Housing – Apartment Complex Given to Non-Profit Organization

The State of Hawaii had attempted to sell the Kama’aina Hale on the Big Island of Hawaii to a private developer. The Kama’aina Hale is in need of major repairs and over half of the 128 affordable housing units are vacant. In a recent development, the University of the Nations, a missionary training schools affiliated with Youth with a Mission, has been given tentative approval to take over the affordable housing complex. In return for the transfer for title, the University of the Nations must be committed to continue renting to the existing tenants. The non-profit plans to renovate the vacant units and turn them into campus housing for its faculty.

According to state officials, the Kama’aina Hale was costing the state a significant amount of money each year in maintenance and upkeep. Officials have been trying hard to sell the Kama’aina Hale and two other projects on the Big Island of Hawaii, but to no avail. Seven groups did visit the property to inspect it, but not a single one had submitted an offer. It is estimated that the cost to renovate the 68 empty units would be between $4 million to $7 million.

Source: Honolulu Star Advertiser, 5-13-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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Sunday, May 12, 2013

Hawaii Tourism – Room Rates Highest In Nation

According to a report released by Hospitality Advisors LLC and Smith Travel Research, Hawaii has the highest average hotel room rates in the nation, beating out New York City and Miami in the runnings. During the first quarter of 2013, a hotel guest in Hawaii spent $233.33 per night, over 13 percent more then the same period a year prior. In comparison, guests spent $10 less per night in Miami and $23 less per night in New York City.

Keith Vieira, senior vice president and director of operations for Starwood Hotels & Resorts in Hawaii and French Polynesia, commented, “From a hotelier standpoint, if we don’t add more inventory, we’ll be fine. But to grow our overall economy, we need to grow tourism. We need managed growth. To me that’s about 400 new rooms or one new property or conversion a year.”

Hawaii Economist Paul Brewbaker of TZ Economics, added, “At higher rates, visitors clipped a day off the length of their stay. When the room hits $380, people say, ‘Holy crap! Why not stay five days instead of six?’ You can imagine that conversation because we all have it when we go to NYC. If total visitor spending is down in real terms and lodging costs are going up, then something else is going down.”

Source: Honolulu Star Advertiser, 5-12-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
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