Posted on: Friday, February 22, 2002

Wal-Mart eyes new site

By Andrew Gomes
Advertiser Staff Writer

Wal-Mart Stores Inc. yesterday said it is considering a conventional, 140,000-square-foot store on a piece of city property in Pearl City.

The planned store would contribute to the most-aggressive expansion goal in the retailer's history, employ about 300 people, and ratchet retail competition up another notch.

But company spokesman Bob Mcadam said yesterday that Wal-Mart has not yet agreed to a purchase price for the 20-acre parcel at the corner of Acacia Road and Kuala Street behind Pearl Highlands Center, where Wal-Mart already operates a Sam's Club store.

"That would certainly be a good site, but it's not the only site we're looking at," said Mcadam, who works out of the Arkansas retailer's headquarters in Bentonville.

Wal-Mart's interest in the property was made public Wednesday as part of a legal settlement by the city to compensate landowner Kamehameha Schools and developer Maunalua Associates for 32 acres just mauka of Sandy Beach along East O'ahu's Ka Iwi coast.

According to the city, Wal-Mart agreed to buy the site for $18 million, which would help the city finance the $60 million to $70 million purchase of the Ka Iwi land.

Yesterday, City Councilman Romy Cachola, who helped broker the deal, said he was surprised by Wal-Mart's statement that it has not agreed to a price.

Cachola said the city and Wal-Mart, which made its offer through local real estate brokerage firm Colliers Monroe Friedlander, have agreed to a sale price, and that signing a purchase contract is subject to negotiations involving certain conditions excluding the price.

Colliers' senior vice president of retail services, Jon-Eric Greene, who also said Wednesday that the price had been agreed upon, declined comment yesterday.

If the deal proceeds, Wal-Mart could conceivably build and open a store as early as next year, according to Greene and Mcadam.

If the deal falls through, however, Mcadam said Wal-Mart is considering other sites. He added that the company envisions more than three stores on O'ahu, and sees room to also grow on the Neighbor Islands.

"We view the whole market there in Hawai'i as a growth market for us," he said.

Wal-Mart has five stores in the state, including two on the Big Island and one in Kahului, Maui, where the company opened its latest Hawai'i location in October.

Wal-Mart's Manana choice comes less than a year after it abandoned plans to build a 150,000-square-foot Wal-Mart store topped with an equal-sized Sam's Club in Honolulu near Ala Moana center.

The company canceled those plans because of issues of financial return on the investment, which included an estimated $30 million purchase of about 9 acres — roughly half as much land at twice the price compared to the Manana deal.

Since then, Wal-Mart has announced a strategy to accelerate expansion of new conventional discount stores and retail supercenters during its fiscal year that started this month.

The Arkansas-based company projects opening 50 new regular stores and 180 to 185 supercenters, which combine a grocery operation with traditional Wal-Mart offerings.

Mcadam said there are no plans for a supercenter at the Manana site, and that 20 acres is fairly normal for the average Wal-Mart store. He added that a store at Manana is not expected to take away from sales at Wal-Mart stores in Mililani and Kunia.

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