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The Honolulu Advertiser
Posted at 6:34 p.m., Wednesday, May 15, 2002

Wal-Mart seals 'superblock' deal

By Frank Cho and John Duchemin
Advertiser Staff Writers

Wal-Mart Stores Inc. today finalized its deal to buy the long-vacant Ke'eaumoku "superblock" near Ala Moana Center, paying an estimated $35 million for the site where the world's largest retailer now plans to stack new Sam's Club and Wal-Mart stores.

The purchase of the 10.5-acre property resolves the destiny of one of urban Honolulu's most-coveted undeveloped commercial properties. Developers and big-box retailers from Wal-Mart to Home Depot to KMart had attempted to buy the parcel from the Wichman Family Trust for more than a decade, but each of the deals had fallen through.

Wal-Mart spokeswoman Cynthia Lin said today that the company plans a 155,000-square-foot Sam's Club for the top floor of its building on the site, a 150,000-square-foot Wal-Mart store on the bottom floor, and several other shops on the parcel bordered by Sheridan, Makaloa, Rycroft and Ke'eaumoku streets.

Lin said several hundred workers probably would be employed at each of the stores and the company wants to finish construction by early 2004.

Analysts said today that the addition of the massive stores in the center of Honolulu will dramatically change the face of retailing in the area, giving consumers increased choices but also putting added pressure on nearby retailers.

"The No. 1 discount retailer will now be in the urban core. This is going to put pressure on your primary retailers anywhere from a one-mile to a 20-mile radius," said Stephany Sofos, a Honolulu real estate analyst.

Sofos estimate the two stores could bring in $150 million to $300 million a year in sales. "And those sales are not coming from a new market. Shopping centers in Pearl City, Kailua, and Hawaii Kai will all be affected," Sofos said.

A sale to Wal-Mart will reshape retailing in Honolulu's urban core — perhaps more than any other previous proposal for the coveted site.

As several analysts previously noted, nearby retailers such as Daiei, Longs, Ross, Foodland and many other smaller stores can expect new competition from the world's largest retailer, though to some extent a Wal-Mart and Sam's Club will draw new levels of customer traffic that could benefit everyone.

Some residents fear traffic congestion, and union organizers two years ago led rallies opposing the nonunion retailer before neighborhood board meetings, but it seemed most consumers welcomed Wal-Mart's plan because of convenience and low prices.

Plans for a six-deck parking garage with about 1,500 stalls also are retained, as is the design for heavy landscaping and a Hawaiian territorial style of architecture. To mitigate traffic, Wal-Mart plans to align Makaloa where it is offset at Sheridan, and install traffic signals at Kanunu and Ke'eaumoku streets. Signals are also being considered for the Rycroft/Sheridan intersection.