State seeks Kalihi Kai property
By Andrew Gomes
Advertiser Staff Writer
The state Department of Transportation is working to condemn a Kalihi Kai property — on which Honolulu Ford had planned to relocate its two O'ahu dealerships — to provide expansion space for interisland shipping company Young Brothers Ltd.
The acquisition of four acres on the corner of Libby Street and Nimitz Highway mauka of Piers 39 and 40 is part of a Harbors Division long-range plan that designates more space for interisland barge operations, according to Transportation Department officials.
Glenn Hong, Young Brothers president, said the company has needed the additional area since it was relocated by the state to Piers 39 and 40 in 1998. Last year, tonnage at Young Brothers' Honolulu hub grew by 8 percent to 10 percent, he said.
"We're pushing through cargo which exceeds the design capacity for this facility," Hong said. "So much cargo comes through this facility that we really need that acreage critically."
As a result, Honolulu Ford has begun to search for another site to consolidate its new-car and used-car dealerships.
The car retailer, which had operated along Ala Moana Boulevard in Kaka'ako since 1964, was forced by the state to move its used-car dealership several years ago to make way for the mauka end of Kaka'ako Waterfront Park.
Honolulu Ford found a temporary location for the 80,000-square-foot dealership at Nimitz and Lagoon Drive near the airport.
In recent years, the company has anticipated having to move its 133,000-square-foot new-car dealership, which is next to the Kaka'ako park and sits on land leased from Kamehameha Schools
In 1997, Kamehameha Schools proposed building a shopping and entertainment center on the site. The project was nixed, but the area has been designated for high-tech uses by the state. So, Honolulu Ford President Dave Chun, who last year extended his lease with Kamehameha Schools for a few more years, knows he will have to go.
"All of the car dealerships eventually have to move," he said.
To prepare, Chun purchased the Libby Street site in 1999 from Japan-based Daishowa for about $5 million and was going to spend another $5 million to build a showroom that reunited the dealerships.
Chun needed rezoning approval, but said he halted the effort when the state first notified him of its interest in the property about a year ago.
The Transportation Department initially offered Daishowa $5.5 million for the property, but later found out that Chun was already in the process of purchasing it, a department spokesman said. A $5.5 million offer to Chun by the state was rejected, according to both sides.
Chun said he turned down the state's offer to pay the same price he paid two years ago, because he wants to at least recoup appraisal costs, property taxes, interest and loan fees he's incurred since buying the property.
A recent appraisal of the property for the state came in at $6.2 million, $700,000 more than budgeted, according to the Transportation Department.
The department has requested additional money from the Legislature. But until it is made available, condemnation cannot proceed, which means Chun is stuck with a property he said he can't use. "I can't do anything with it," he said. "(The state) can't do anything with it. I could sell it, but nobody's going to buy it knowing it's under condemnation. I just gotta wait."
If money is appropriated this legislative session for the purchase, the state could file to condemn the property July 1 and take possession 30 days afterward, unless the condemnation is contested, according to the Transportation Department.
