Oct. 06–A 230-room hotel tower is slated to replace a failed four-story retail complex near the Ewa end of Waikiki known best as the site of the long-closed NikeTown store.
The owner of the empty King Kalakaua Plaza building submitted a permit application to the city to redevelop the site, which fronts Kalakaua and Kuhio avenues between Olohana and Kalaimoku streets.
California-based Robertson Properties Group, which owns the site through affiliates, is also scheduled to make a presentation at a Waikiki Neighborhood Board meeting Tuesday.
John Manavian, a Robertson official involved in the plan, could not be reached for comment Wednesday.
Joseph Toy, a hotel industry analyst with Hospitality Advisors LLC, said the project is the result of strong demand for hotel rooms in Waikiki, where occupancy has been at about 85 percent for the last five years or so.
"That's pretty tight," he said, noting that hotel rooms are booked solid during many times of the year when it is popular to visit. "Eighty-five percent is basically at capacity. There's definitely room for new hotels in the market."
Other new hotel projects include a recently opened Ritz-Carlton tower adjacent to the King Kalakaua Plaza building; it will be joined by a second, adjoining Ritz tower, which is under construction. Construction also is underway to convert the Waikiki Trade Center office tower into a Hyatt hotel.
Under zoning rules, a tower on the King Kalakaua site is permitted to rise 300 feet or possibly higher.
IF THE plan is carried out, the hotel tower would add new life to a portion of Waikiki that other developers thought would do well with big-name retail tenants.
King Kalakaua Plaza was developed in 1997 for nearly $45 million and includes 186 underground parking stalls on the site of the former Kuhio Theaters.
Multilevel flagship stores NikeTown and Banana Republic were the tenants along with the Official All Star Cafe, a sports-themed restaurant established by Planet Hollywood and backed by professional athletes including Tiger Woods, Shaquille O'Neal, Ken Griffey Jr., Joe Montana, Wayne Gretzky and Andre Agassi. A fourth-floor space intended for a restaurant was never occupied.
Two years after opening, All Star Cafe closed. Another sports bar replaced it, but it also fizzled and closed.
The two anchor retailers continued until 2009, when the U.S. economic recession unfolded. The project's developer, Hawaii firm Honu Group, had lost the building to foreclosure in 2006, in part because of its half-empty status.
An affiliate of investment bank Lehman Bros., which had financed the project, took ownership of the complex.
Then Lehman plunged into bankruptcy and the company handed over the property to affiliates of Robertson around 2010. Robertson was the former real estate arm of former Kuhio Theaters operator Consolidated Amusement Co., which had leased the 1-acre block to Honu and was owed unpaid ground lease rent by Lehman.
Building a hotel on the site was not possible under city zoning regulations until 2011 when the City Council abolished a "resort commercial" zoning category, which prohibited hotels on the property, and rezoned it for mixed uses including hotels and residential and retail establishments.