Economic Analysis of Downtown Honolulu

Macy’s Inc. has announced that they will be closing their downtown Honolulu location at Fort Street Mall on February 28, 2013. Macy was the only major department store in downtown Honolulu, leaving many real estate experts wondering what direction the area will take in the coming years. One major challenge for retailers in downtown is the fact that most of the office workers leave by early evening, leaving the streets completely empty. Stephany Sofos, a real estate analyst, commented, “You need more residential (occupancy) to make it a vibrant city that doesn’t roll up their sidewalks at 5 p.m. when everyone goes home from work. That’s why putting in a residential component with office and retail would be the highest and best use because you’d have all moving parts together, people working there, eating there and sleeping there.” Darcy Lampe, a Macy’s store patron, agreed and added, “It’s like a ghost town here on the weekends, But you can see it gets a lot of traffic at lunchtime.”

Source: Honolulu Star Advertiser, 1-4-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
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Aloha Tower Marketplace Dispute Update

In December 2011, real estate developer Ed Bushor purchased the Aloha Tower marketplace for approximately $14 million. Bushor’s financial partner was Hawaii Pacific University who came up with the money for the actual purchase. Bushor’s idea was to renovate the Aloha Tower Marketplace and convert the currently vacant shops into student dormitories and other amenities for Hawaii Pacific University. However, in a recent turn of events, HPU has used a provision within the contract to forcefully buy out Buchor’s 20 percent interest for $5 million and has removed Bushor as the project manager.

Hawaii Pacific University has decided to proceed with the redevelopment that Bushor had come up with, but is still waiting from the state’s permission to assume complete management and ownership of Aloha Tower Marketplace. HPU plans to spend an additional $32 million and would add new retailers, restaurants, a dorm for 320 students, additional parking and office spaces, and a sports and entertainment complex. The complex would be renamed the Tower District.

Developer Ed Bushor has hired attorney Michael Green, who has filed litigation against HPU for fraud. This could significantly slow Hawaii Pacific University’s redevelopment plans, as it is likely that the state would wait to give approval until the litigation issue has been resolved.

Source: Honolulu Star Advertiser, 1-4-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
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Additional State Tax Revenue Forecast

The state of Hawaii’s Council on Revenues has announced that forecast an increase of state tax revenue by 5.1 percent during the 2013 fiscal year, which will end in June 2013. This was an increase from the 4.9 percent predicted by the council in September 2012 and would mean an additional revenue of $10.3 million that the state could spend. Furthermore, the Council on Revenues predicts that revenue growth would grow by 6.8 percent for the 2014 fiscal year, an increase from the 3.9 percent that they had predicted previously. Governor Neil Abercrombie commented, “I am pleased the Council on Revenues is taking a long-term view of our economic future, which coincides with our financial plan, working responsibly toward a stable fiscal growth. The budget proposal that we submitted to the Legislature is mindful of the revisions of the council. The rate of revenue growth that they continue to forecast in the current year makes sense and is still very strong.”

However, economists remain very cautious, and worry how changes in federal spending and plans to reduce federal debt would affect Hawaii in the years to come. Furthermore, Hawaii’s strongest political champion, U.S. Senator Daniel Inouye has passed away in December of 2012, and experts predict that would severely hurt Hawaii in the coming years. State budget director, Kalbert Young, commented, “My opinion is that there is no way to quantify or measure, because the value that Sen. Ino­uye contributed in terms of what he was able to accomplish for Hawaii, not only in funding, but politically in Congress, leadership, all of those components. There is no way to measure how big that impact is. And how much can the current congressional team overcome those issues? There’s just no way to measure that.”

Source: Honolulu Star Advertiser, 1-4-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com

Macy’s Downtown Honolulu Store Closing

Macy’s Inc. has announced that they will be closing their downtown Honolulu Store located at 1032 Fort Street Mall. The 80,000 sq ft store will close its doors withing seven to eleven weeks, and store officials have stated that they hope to move all 91 employees to other stores in Hawaii if possible. Chief Financial Officer for Macy’s, Karen Hoguet, stated, “We remain committed to operating a successful and growing stores business as part of our company’s Omnichannel strategy for serving customers wherever, whenever and however they prefer to shop. This leads us to open new stores where we see the opportunity to fill gaps in important markets, as well as to make the tough decision to selectively close under performing stores that no longer meet our performance requirements or where leases are not being renewed.”

Source: Honolulu Star Advertiser, 1-3-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com

Big Island Real Estate – Kilauea Eruptions Added 50 Square Miles in Last 30 Years

On January 3, 1983, the Eat Rift Zone eruption started for the Kilauea volcano on the Big Island of Hawaii. Over the last three decades, the lava flow destroyed 214 structures and forced hundreds of additional families to relocate out of its path. However, with no signs of slowing down, the lava flow is credited with bringing more then 1 million visitors each year to see this natural wonder and has created nearly 50 square miles of new land. Former Big Island of Hawaii Mayor Harry Kim reflected on the thirty year anniversary and stated, “In 1983, if someone would have guessed (it would have lasted) five years or even two years, we would have all laughed them out of the room. And here it is, thirty years.”

Source: Honolulu Star Advertiser, 1-3-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
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Hawaii Economy – Personal Income Growth Slows in Third Quarter

According to a report released by the United States Bureau of Economic Analysis, personal income growth for the state of Hawaii slowed to 0.5 percent during the third quarter of 2012.  This was a significant decrease from the 1.8 percent growth reported during the second quarter of that year.  Still, the state of Hawaii’s Department of Business, Economic Development and Tourism predicts that personal income for Hawaii residents will grow by a total of 4.3 percent in 2012 as a whole.  However, this will equate to approximately 1.8 percent growth once inflation is factored in.

Source: Honolulu Star Advertiser, 1-2-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com

Hawaii Tourism Authority's Goals for the Neighbor Islands

The Hawaii Tourism Authority had announced that increasing the number of visitors to the neighbor islands of Hawaii is one of their top priorities in 2013.  According to HTA officials, they hope to do thus by increasing the number of direct flights to the neighbor islands from the U.S. mainland and internationally.  Vice president of brand management for the HTA, David Uchiyama, stated, ”We can anticipate either increases of service from existing carriers or possibly some new carriers jumping into some of these markets,.  They’ve seen substantial growth year over year, but we want to continue distribution to the neighbor islands.”

Source: Honolulu Star Advertiser, 1-1-2013, www.staradvertiser.com
Posted by Jeff Uyemura-Reyes, Broker-in-Charge, Realtor®
Global Executive Realty, LLC
www.myhawaiihomesearch.com
www.myhawaiicondo.com
www.myhawaiidreamhome.com