New bid tendered for Victoria Ward property
By Andrew Gomes
Advertiser Staff Writer
The owner of Ala Moana Center made a last-minute offer yesterday for Victoria Ward Ltd., one of the state's largest private landowners and operator of a growing retail complex on 65 acres in Kaka'ako.
Deborah Booker • The Honolulu Advertiser
Honolulu firm Alexander & Baldwin Inc., which in February said it had expressed interest in acquiring Victoria Ward, had been the front-runner in acquisition talks until the higher offer was submitted early yesterday by General Growth Properties Inc., according to two people with knowledge of negotiations who asked not to be named because of the sensitivity of talks.
Victoria Ward last year took its vision to another level last year when the Ward Entertainment Centre opened with a 16-screen theater, Dave & Buster's, and several new restaurants and retail shops.
Victoria Ward board members were weighing the offers from both companies throughout the day yesterday. No announcement of a decision had been made early last night.
Closely held Victoria Ward had offered to sell its entire 65-acre estate — including Ward Entertainment Centre, Ward Centre and Ward Warehouse — in a quiet effort late last year.
If a sale agreement is reached, it would be one of the largest of a company or property in Hawai'i in the past few years, including last year's $200 million purchase of Liberty House by Federated Department Stores Inc.
The retail complex, with a 16-screen theater and 140 retailers and restaurants, is O'ahu's third-largest after Ala Moana and Pearlridge centers.
Several local real estate analysts have said they believe that A&B is better suited for such a purchase, given its history of owning and developing Hawai'i real estate, and interest in buying local shopping centers.
But General Growth also has a strong incentive to buy Ala Moana Center's nearby competitor, which has been drawing more consumers in recent years, analysts said.
"If it's between the two (A&B and General Growth), it's tough because they're both vested in the market; they both have a huge interest in the marketplace," said Douglas Pothul, senior vice president of local commercial real estate firm Colliers Monroe Friedlander.
"In the hands of the right owner and developer, (Victoria Ward) could damage Ala Moana Center," he said, adding that the move by General Growth is "kind of like protecting their flank."
Both publicly traded companies have the capital resources to make such a purchase, which is estimated to be valued between $200 million and $250 million, but could go higher with intense negotiations.
Mitch D'Olier, Victoria Ward's president and chief executive officer, declined comment Wednesday and could not be reached yesterday. An Alexander & Baldwin spokeswoman has said company officials cannot comment.
John Bucksbaum, chief executive officer of Chicago-based General Growth, was in Honolulu yesterday but could not be reached for comment. Dwight Yoshimura, Ala Moana general manager, declined comment.
General Growth, a $2.8 billion real estate investment trust, owns or manages more than 140 malls in 39 states, and was one of the most active buyers of malls in the 1990s.
If it is able to acquire Victoria Ward, General Growth would control about 2.4 million square feet of retail space on O'ahu — about 1.8 million at Ala Moana and an additional 600,000 at Victoria Ward.
Alexander & Baldwin, the state's fifth-largest private landowner with a mix of retail, office, industrial and residential property, has aggressively pursued Hawai'i real estate acquisitions, spending about $200 million buying and developing mostly Hawai'i property in the last two years.
In 1999, A&B tried to buy Ala Moana Center in partnership with Simon Property Group, the nation's largest shopping mall operator, but its roughly $800 million bid lost to an $810 million offer by General Growth.
Victoria Ward's sale would end more than 130 years of ownership by descendants of Victoria Robinson and Curtis Ward, who once lived on an estate, Old Plantation, where Blaisdell Center is today.
Selling the company would provide a sizable return to about 35 shareholders, including members of the local Hustace family related to the Wards. Some observers say several shareholders are aging and are interested in cashing out after years of modest earnings.
Depending on who emerges as the Ward estate's future owner, changes could be in store for future development on the property, analysts said.
Victoria Ward last year announced a plan to replace Ward Warehouse with a 550,000-square-foot center that would include a 150,000-square-foot Nordstrom department store projected to open in late 2005.
Ward's master plan also includes residential high-rises, a supermarket, more parking and street realignment.
The estate, incorporated in 1930 as a closely held private company, was long a mostly industrial mix of property converted over the decades to mostly entertainment and retail.
The retail vision crystallized in the early 1990s with additions such as Pier 1 Imports, Ross, Office Depot, Sports Authority and Nordstrom Rack. The vision was taken to another level last year when the Ward Entertainment Centre opened with a 16-screen theater, Dave & Buster's and several new restaurants and retail shops.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
