Aloha Tower Marketplace sues state over parking

By Andrew Gomes
Advertiser Staff Writer

The owner of Aloha Tower Marketplace is suing the state to recover more than $10 million in alleged losses that it claims were caused by the state's unwillingness to allow the center to build additional parking that the state requires as marketplace landlord.

The suit was filed yesterday in Circuit Court by Aloha Tower LP and AHI Aloha LP, which partnered to buy the waterfront shopping center out of bankruptcy in 1997.

The marketplace at Ho-nolulu Harbor has suffered from a lack of sufficient parking since it opened in 1994, and according to the suit, the shortage has discouraged major tenants from opening stores at the center and has created a need to reduce the rent of existing tenants.

The partnership — in the past 2 1/2 years it has proposed five parking solutions, all of which have been rejected by the state — said it has run out of proposals and filed the suit as a last resort.

"We're stuck," said Jon Miho, a local attorney and president of Aloha Tower LP, the marketplace's managing partner. "We have to protect our investors and our tenants. We're up against the wall, and (the state) can only push us so far."

Ron Hirano, executive director of Aloha Tower Development Corp., the state agency governing development surrounding the marketplace, said he had not seen the suit against the agency and could not comment. He said the agency and its board have been working with marketplace owners to resolve the parking problem.

Miho disagreed. "We've tried in good faith to try and work this problem out, and they just can't get their act together," he said. "They just don't care that we're stuck and we're losing money and we can't solve the problem on our own. They can help solve the problem, but they haven't."

Aloha Tower LP has proposed parking garages ranging from 430 to 800 stalls at or near Piers 5 and 6, 10 and 11, and at Irwin Park. Each time, the agency board rejected the proposals.

At a meeting more than a year ago, agency legal counsel advised board members that rejecting the last proposal for a 450-stall garage just diamondhead of a Hawaiian Electric power plant mauka of Piers 5 and 6 could open up the agency to legal action from marketplace owners.

Miho said the company has spent $500,000 on parking studies and architectural drawings. Furthermore, he said, the owners have invested $6 million in the center since 1998 and have lost an average of about $1.5 million a year.

Because of the parking shortage, the center also has lost potential rent from prospective tenants, including restaurant and game emporium Dave & Busters, according to Miho. "They love (the marketplace)," he said. "It's on the water, but because there's no adequate parking they go look someplace else."

The suit also charges that the agency has refused to make good-faith efforts to direct cruise ships to dock at Aloha Tower piers, and converted a ferry terminal to another use that doesn't generate significant customers for the center.

Under the marketplace lease with the state, about 300 more stalls are required, and technically marketplace owners are in default on their lease.

Parking problems have only worsened since Sept. 11, according to center officials, because heightened security requirements prohibit use of about 150 stalls when cruise ships are docked at Piers 10 and 11.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.