Kapalama tenants allowed to stay
By James Gonser
Advertiser Urban Honolulu Writer
Several small businesses at the Kapalama Military Reservation have been in turmoil for more than a year, expecting to be booted out of their old Army buildings to make room for Kaka'ako produce companies being moved from the waterfront to make room for the new University of Hawai'i medical school.
Richard Ambo • The Honolulu Advertiser
It now appears they can stay where they are, for the time being.
Clean-N-Rooter found this new location at Kapalama Military Reservation but has since learned its eviction notice has been canceled.
About a dozen tenants at the Kapalama site had been told to move by Feb. 15, but a certified letter from the state Department of Transportation dated Feb. 12 gave them a reprieve.
"We just got notice that we don't have to move," said Judy Brinck, operations manager for Clean-N-Rooter. "This is the third time we've been told to move and then we don't have to move. We are frustrated about the whole thing and don't know what is going on one day to the next."
Brinck said she spent about $6,000 to renovate another building on the property and expects to spend more.
Businesses that procrastinated or had nowhere to go lucked out, because a land swap involving the state, UH and Produce Center Development Ltd. fell through.
The produce company, which had a 55-year lease expiring in 2029, decided it might be better to own its new location rather than lease from the state again. Produce Center, a distribution facility used by eight companies, still must vacate its Kaka'ako site by Aug. 31 to make room for the medical school.
UH plans to break ground on the first phase of a new John A. Burns Medical School and Cancer Research Center in September.
The state completed the purchase of the 55-acre Kapalama Military Reservation in 1993 after it was declared surplus property by the federal government. The land has since become the fallback location where the state moves any businesses on property that it wants to take. The tenants get only 30-day leases.
Jadine Urasaki, deputy director of transportation, said long-range plans call for using the site to expand container operations at Honolulu Harbor, but at an estimated cost of $100 million the project is many years away.
"Where we are in the whole economic climate will play a major role, and that is why we will continue to do revocable permits, not long-term leases — to keep our options available," Urasaki said.
Produce Center will receive $3.4 million from UH for improvements it made on the Kaka'ako property. Subtenants will receive $3.4 million for their improvements.
The group is negotiating to buy a vacant parcel on Sand Island Access Road formerly used by Hawaiian Bitumuls Paving & Precast Inc. The 5.43-acre site has an asking price of about $9.2 million and is owned by Real Estate Delivery Inc., a property holding company for First Hawaiian Bank.
Because the property was used for construction materials, the soil must be cleaned before a facility is built. The produce companies will not be able to move in before their Aug. 31 moving deadline.
Jan Yokota, executive director of the Hawai'i Community Development Authority, said her office manages the Kaka'ako site and is working to find a temporary location for the Produce Center, possibly in two warehouses next to the current location in Kaka'ako.
Yokota said the state also agreed to give Produce Center $200,000 to move to temporary space.
The state Department of Agriculture, which shared the Kaka'ako site with the produce companies, is moving to the Kapalama reservation, where two buildings costing about $14 million are under construction. The plant quarantine facility, quality assurance branch and measurement standards branch will occupy 4 acres.
Despite the uncertainty, Kapalama tenants say the old military installation is a good place to do business. It is a fenced compound with some security and the location allows easy access to freeways and the harbor. The downside is almost everyone is on a 30-day permit for their space.
Fred Salassa, owner of Triple F Distributing Inc., was moved to Kapalama with other property owners when the state took over his Ualena Street property in 1992 to expand the Honolulu Airport.
"Everybody here is on month-to-month. That is one reason why the rent is low, because you may have to pack up," Salassa said. "Once you've been here for a few years, it is kind of hard to accept that. It is very disruptive to move. I don't want to move if I don't have to."
Reach James Gonser at jgonser@honoluluadvertiser.com or 535-2431.
Correction: Mark Teruya is head of Produce Center Development Ltd. and is not affiliated with Times Supermarkets. A previous version of this story had incorrect information.
