State buying part of old post office

By Johnny Brannon
Advertiser Staff Writer

The historic U.S. Post Office, custom house and court house on South King Street, where the downtown post office still operates, will be privately developed, with a portion going to the state for office space. Deborah Booker • The Honolulu Advertiser

The 80-year-old building is owned by the U.S. Postal Service, which operates the downtown post office in the part of the building that faces Merchant and Richards streets.

The plan is for a private developer to buy the structure and renovate it, then sell about 90,000 square feet to the state for use by the Department of Commerce and Consumer Affairs. The post office would remain.

The deal has not yet been finalized, and officials declined to name the developer while it is pending. But the state's new construction budget includes $33 million for the project, which officials say should cover the purchase and renovation of the state's portion.

The six-story building, bounded by Merchant, Richards, Mililani and Queen streets, was constructed between 1917 and 1922, with a second wing added in the 1930s.

The structure includes a courtyard bounded by distinctive arched walkways, and served as a court house and custom house as well as a post office. It is listed on the state and national registers of historic places.

"It's a beautiful old building, but it's just not in good shape now because it hasn't been used for some time," said Kathryn Matayoshi, director of the Department of Commerce and Consumer Affairs.

The department needs to move out of its home in the nearby Kamamalu Building, at Merchant and King streets, because major repairs such as asbestos removal, air conditioner replacement and wiring upgrades are needed, she said.

"Those are problems that don't get fixed easily without us moving out of the building," she said.

Ivan Nishiki, head of the leasing branch of the Department of Accounting and General Services, said the $33 million set aside for the project is based on an estimate, but that a final price has yet to be negotiated.

That will depend in part on how much construction companies bid for contracts to renovate the property, he said.

An architectural study performed last year estimated that it would cost $13 million to bring the building's interior up to current standards, or $11.6 million to gut it so improvements could be made.

Nishiki said paperwork to complete the sale could be finished by June, and that the state could occupy the building by this time next year.

Various private and government entities have expressed interest in the old post office building in the past, but their plans all fell through.

One group of developers planned to turn the building into a $54 million boutique shopping center, which alarmed some historic preservationists. But the postal service spiked the idea in 2000 after financing for the project fell through.

The building once housed the Department of Hawaiian Home Lands.

And last year, the Office of Hawaiian Affairs considered trying to buy the building to use as a new headquarters for itself and a range of private groups that assist Hawaiians, or for the seat of a restored Hawaiian nation.

But OHA trustees disagreed on whether the plan was economical in light of the expensive renovation and disabled access work that was needed, and the agency never made an offer for the property.

Nishiki said no decision has been made on what would happen to the Kamamalu Building once the Department of Commerce and Consumer Affairs moves out.

The state budget includes $1.4 million to plan and design the work needed there, but no estimates are yet available for the cost of actual repairs.

Several state agencies lease office space from the private sector, and Nishiki said one of them likely would be moved into the Kamamalu Building to save money after it is renovated.

Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.