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The Honolulu Advertiser
Posted on: Sunday, September 15, 2002

Mall guru focuses on Hawai'i

By Andrew Gomes
Advertiser Staff Writer

John Bucksbaum oversees a publicly traded Chicago company with a $14 billion portfolio of 117 regional shopping malls in 42 states.

General Growth Properties Inc., which owns the Ala Moana Center, purchased Victoria Ward Center in May.

Advertiser library photo • Apr. 4, 2002

But lately, he has been spending more time in Hawai'i and thinking about opportunities for making two of the state's largest retail centers bigger and better.

As chief executive of General Growth Properties Inc., the owner of Ala Moana Center that in May bought Victoria Ward Ltd. for $250 million, Bucksbaum has visited Hawai'i four times in as many months — once on vacation.

The modern-day mall guru sat down with The Advertiser last week during his latest trip and shared some thoughts about Victoria Ward and Ala Moana, which along with General Growth-owned Prince Kuhio Plaza in Hilo make up close to 12 percent of the company's net operating profits.

The following are excerpts from that conversation.

Q. General Growth for years has operated shopping malls in Hawai'i. What have you learned since purchasing Victoria Ward Center?

A. I think Victoria Ward really caused me to appreciate the history that went along with the project ... the significance and the tradition, and knowing that tradition and those kinds of things are very important here in Hawai'i — and more so than in other places.

Q. In the four months since the purchase, what have you been working on as the new owner of O'ahu's third-largest retail center and 65 acres in Kaka'ako?

A. It's really been a continuation of learning, understanding the dynamics of it (and) learning of the plans for Kaka'ako in general that will ultimately influence (Victoria Ward).

We just try to gain greater and greater knowledge and more and more observation as to what the patterns are, and trying to think how do you complement Ala Moana with Victoria Ward? Which retailers are best suited for Ala Moana and which retailers are best suited for Victoria Ward?

There's no precise science to any of this, but it's a matter of just spending time and giving the project that time and attention that's necessary to make some decisions.

Q. Do you think some tenants at one center would be better suited at the other?

A. Ahhh, maybe in a rare occasion. Generally, I don't think (so). It's more about going forward, because here at Ala Moana there's literally hundreds of retailers who have interest in Ala Moana who just for whatever the reason, haven't been able to become part of it today. Some of them, because they aren't best suited for Ala Moana, or a host of other reasons. One is there is only a very little amount of (available) space. All of that determines who you want to put in.

There is a long line of retailers who would like to be represented, many of whom aren't in Hawai'i. It sort of makes you start trying to — sort of like a chess game or a puzzle — start putting the pieces down. But you have so many different choices. You want to try to evaluate all of the options before you make a final decision. We're just in this exploration process.

Q. Are there any retailers you can name that General Growth has been unable to make room for at Ala Moana who might have a future at Victoria Ward now?

A. I'm not the one who's been intimately involved ... with the leasing of Ala Moana. Generally, some of the larger space users who are the hardest ones to find room here at Ala Moana.

Q. Are there any plans to expand Ala Moana?

A. Yeah, we've always had thoughts and we've even had plans, but we've also had certain restrictions that we've had to abide by. Ala Moana can be expanded and the simple answer is yes, we do continue to look at that.

Q. Is there still a desire to develop an entertainment complex at Ala Moana like previous Ala Moana owner Daiei Inc. proposed before General Growth bought the center in 1999?

A. That was a plan we (as manager of Ala Moana) developed for Daiei. When the theaters got built at Victoria Ward, that changes what you can do. But we never rule those things out. Those plans do still exist — in plan form. It's always possible.

Q. What's your assessment of the conceptual plan that Victoria Ward had to replace Ward Warehouse with a 550,000-square-foot mall anchored by Nordstrom?

A. That was really being designed and developed to be in direct competition with Ala Moana. What we want the two centers to do is complement one another and not necessarily compete. There's already certain amounts of competition for any retail store vying for disposable dollars out there.

Q. Would you consider that project on indefinite hold or dead?

A. We still look at (the project) and try to figure out if the pieces make sense with what we want to do. Or go in an entirely different direction. Or maybe that is still the best thing. We just don't know. It's just part of the overall planning process. We've by no means settled upon what that plan should be.

Q. Have you reached any agreement with Nordstrom to provide them department store space at either Victoria Ward or Ala Moana?

A. It's been a conversation that has been ongoing for a long period of time, and it does continue on.

Q. Can you say whether you favor a Nordstrom full-line department store at Ala Moana or Victoria Ward?

A. I think again it depends on what one is trying to do with Victoria Ward more so. Because if Nordstrom were part of Victoria Ward, it changes the flavor, the environment, of Victoria Ward considerably.

If Nordstrom were at Ala Moana, it would certainly add to Ala Moana but it wouldn't radically alter — I mean you don't have a department store at Victoria Ward today.

That's probably the biggest difference, but bottom line: Nordstrom would be a good addition to the retail community in Hawai'i and if they're going to be in Hawai'i, would we prefer to have them in one of the two properties? The answer is yes.

Q. Are their any major retail redevelopment ideas you have for Victoria Ward that don't include a Nordstrom department store?

A. We haven't developed any plans. We're still just in the stage of ideas and discussion. We haven't even tried to put something on a piece of paper.

Q. Can you share any partial ideas?

A. Again, it's more brainstorming. You think about what would a department store mean to that site? What would big-box users bring to that site? Whether national retailers mean vs. local retailers? Who are we trying to appeal to? Does it include the tourist segment of O'ahu or is it local business? Do you want it to be pedestrian friendly or do you need your car to get around? Obviously there is already a major entertainment component that's been built. How does one take advantage of that?

There's the No. 1 Jamba Juice and one of the top Starbucks. That tells you about some of the patterns that people have, and you try to understand that and build off of that. And to a certain degree timing plays an important role. What happens on some of the land that we don't own but is adjacent or close enough to make a meaningful difference?

Q. Do you like the idea of closing off Auahi Street to vehicles, making it a pedestrian promenade?

A. Oftentimes when streets have been closed at retail projects they've ultimately come back to be re-opened. That will be clearer with a lot more study and design. You've got residential traffic that drives through there. There's industrial traffic that's in there because of the warehouses, grocery traffic because of the Farmers Market and then a lot of pedestrian traffic.

You have to weigh options. It's an urban environment.

Q. A lot of people consider the parking situation a little constrained. What's your assessment of the parking, and are there any short-term plans to make parking more available and convenient?

A. At this point, no, we don't. And having not been involved in the process previously, I presume there probably have been the necessary number of spaces, and there are times of the day when the numbers of spaces (used) are high, and times when it is low.

It's an obvious issue and in due time as we figure out our plans, we can take all of that into account.

Q. Local developers The MacNaughton Group and Kobayashi Group are moving forward with the permitting process to develop Victoria Ward's first residential high-rise, a luxury tower at the diamondhead end of the property. Would General Growth consider doing similar developments, or selling Victoria Ward parcels suited to residential development?

A. Anything's possible. Historically, we have tended to prefer to keep land as opposed to selling it. We haven't done too much development in recent years outside the retail vein, but that's not to say that we don't have the expertise or can partner with the expertise to do other forms of development.

Right now our focus is primarily on the retail, but these other components are important pieces of an overall plan.

Q. In the short time that General Growth has owned Victoria Ward, has it performed at, above or below your expectations?

A. Oh, I think we're already seeing some improvements. Certainly it's surpassed our expectations, and we've had some nice, pleasant surprises in the short time that we've owned it.

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