Costco to build new store in Iwilei
By Andrew Gomes
Advertiser Staff Writer
Costco Wholesale has completed a $31 million purchase of 12 acres at Dole Cannery in Iwilei to build and open a massive new store on the outskirts of downtown Honolulu.
The deal between the members-only retailer and cannery owner Castle & Cooke Properties Inc. will bring more convenience to area shoppers, as well as competition to smaller retailers who will lose what has been an advantage of being closer to consumers in the urban core.
Costco plans to build a 150,000-square-foot store and a roughly 800-space parking lot on a site mauka of Home Depot. The store is scheduled to open early next year.
Representatives of Issaquah, Wash.-based Costco were not available yesterday. But they have said they may close the company's older and smaller Salt Lake store in the Bougainville Industrial Park, though there are no immediate plans to do so.
Costco has also indicated that a gas station would be part of its Iwilei store, but that is not currently in its plans, according to Castle & Cooke.
For Costco, the new store is part of a strategy to maximize sales by selling more fresh foods and special-order merchandise at bigger stores.
The 120,000-square-foot Salt Lake Costco, which is 20 percent smaller than the planned Iwilei store, opened in 1988 as the company's first store in Hawai'i. It was only the 41st store for Costco, which now operates 363 warehouses, including five in Hawai'i.
"The new Costco in Iwilei will provide all of the departments, services and parking that we will need to best serve our members on O'ahu," Jeff Brotman, Costco's chairman, said in a statement.
In addition to Salt Lake, Costco operates stores in Waipi'o and Hawai'i Kai, and on Maui and the Big Island. Only Costco Waipi'o sells gasoline. The Waipi'o store, which opened last July, is the biggest at 155,000 square feet. The Hawai'i Kai store is the smallest at 110,000 square feet.
For Castle & Cooke, the addition of Costco is the latest move to reposition the former pineapple processing plant after efforts to operate it as a retail outlet mall failed. The addition of one of the busiest members-only retailers is expected to help build a critical mass of consumers at the office, retail and entertainment complex.
"We're pleased to have Costco become an integral part of our redevelopment of the Dole Cannery property," said Harry Saunders, Castle & Cooke president. "With Home Depot, Costco and the theaters, it's really starting to become a strong power center."
The complex has undergone a series of transformations starting in the 1980s, when Castle & Cooke began converting the upper floors of the main, four-building cannery complex into offices.
In 1994, Horizon Group Inc., a Mainland developer of factory outlet centers, leased more than 200,000 square feet on the first two floors, and transformed it into The Shops at Dole Cannery. Painted bright yellow to help shoppers find it, the center opened in 1996.
But despite outlet-mall success at Waikele, the concept at Iwilei didn't work. Horizon wrote off its $32 million investment in 1998 and abandoned its project with Castle & Cooke, which took back the property.
Castle & Cooke began its own repositioning, and in 1999 added an 18-screen Signature Theatres and a 24-hour Home Depot. Last year, Kaiser Permanente leased 90,000 square feet for offices. Also filling out the complex recently have been furniture showrooms, several smaller office tenants and service providers.
Though the factory outlet retailers are all but gone, some traditional retail will remain along a ground-floor path through the center to feed off cross-traffic between the theaters, conference rooms, parking garage, Home Depot and Costco.
Opening early next month will be gourmet foods retailer Strawberry Connection of Hawaii. One or two restaurants are being sought for space next to Signature's cinema.
"It's exciting. We think we have a good mix there," Saunders said.
Castle & Cooke's 42-acre Iwilei property will be about 80 percent occupied when Costco opens.
The company is a subsidiary of Castle & Cooke Inc., developer of the commercial properties Mililani Technology Park, Town Center of Mililani and Dole Plantation as well as the residential communities Mililani Town, Mililani Mauka and Royal Kunia.
Andrew Gomes can be reached by phone at 525-8065, or by e-mail at agomes@honoluluadvertiser.com.
