Nordstrom negotiations revived
By Andrew Gomes
Advertiser Staff Writer
The recent buyer of Victoria Ward Ltd. has started new negotiations to develop the first Nordstrom department store in Honolulu after canceling a preliminary agreement to make the retailer an anchor of a proposed shopping complex replacing Ward Warehouse.
Victoria Ward and Nordstrom representatives said their previous agreement, a largely unbinding letter of intent signed in November, was canceled by General Growth Properties Inc. as it finalized its purchase of Victoria Ward a month ago.
The move means it may again be unclear where Nordstrom will end up in its effort to open a full-line department store in Honolulu.
Nordstrom spokeswoman Deniz Anders said she could not go into specifics, but said the company and General Growth are discussing possibilities for establishing a Nordstrom department store in Honolulu. "We're reviewing all of our options," she said.
A General Growth spokesman said yesterday he was unfamiliar with circumstances regarding the cancellation. The company's chief executive, John Bucksbaum, could not be reached.
Seattle-based Nordstrom has tried to open a department store in Hawai'i for roughly 10 years, but has seen promising deals come and go. In 1996, the retailer announced plans to open a 268,000-square-foot store at Ala Moana Center as early as 1999. But that proposal ran into trouble when Ala Moana department store anchor Liberty House objected, citing a provision in its lease that allowed it to block the plans.
Two years ago, Liberty House filed a lawsuit against General Growth, which bought Ala Moana in 1999, to enforce its lease provision. Soon after, Nordstrom gave up its plan.
Then in November, Victoria Ward announced it had signed a letter of intent with Nordstrom, which planned to open a three-story, 150,000-square-foot store possibly by late 2005.
The store was to be a primary anchor for a 550,000-square-foot complex replacing Ward Warehouse. The $150 million to $200 million project was in a conceptual stage, and subject to financing and finding a development partner.
But Victoria Ward also was working on a deal to sell the company, and in April announced General Growth would buy Victoria Ward and its 65 acres of mostly retail property in Kaka'ako for $250 million.
At the time, Bucksbaum said his team would study Ward's expansion plan, but that he couldn't say if he preferred a Nordstrom department store at Ward or Ala Moana.
Several Ward Warehouse tenants yesterday said they were unaware that General Growth had canceled Victoria Ward's agreement with Nordstrom.
Audrey Fu, owner of women's apparel store Villa Roma, said she won't be disappointed if the Nordstrom-anchored project at Ward is not revived. "I really believe part of the charm of Ward Warehouse is all the small, individual stores," she said. "If we become a carbon copy of another big mall, why should (consumers) come to us?"
Local retail experts yesterday said they were unsure what to make of General Growth's cancellation of Victoria Ward's agreement with Nordstrom.
Some said General Growth could simply be trying to get better terms of a deal with Nordstrom at Ward Warehouse.
Others said General Growth may be weighing whether Nordstrom at Ward Warehouse would pull shoppers away from Ala Moana and discourage retailers from leasing space at Ward, which is 97 percent leased, and may also be considering trying to persuade Liberty House's successor, Macy's, to reverse its opposition to allowing a Nordstrom department store in Ala Moana.
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
