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The Honolulu Advertiser
Posted on: Monday, February 3, 2003

Wal-Mart deal angers Pearl City

By Catherine E. Toth
Advertiser Central O'Ahu Writer

Wal-Mart is near closing a deal with the city to purchase 20 acres in Manana for its third store on O'ahu, but residents are incensed because the big-box retailer will not be required to pay for traffic improvements even though its outlet is expected to add as much as 20 percent to the heavy vehicular load on Kamehameha Highway.

Wal-Mart has until the end of this month to finalize an agreement with the city to build a 140,000-square-foot retail store behind Pearl Highlands Center, where the company operates a Sam's Club.

"We continue to be interested in that site for a Wal-Mart store," said company spokeswoman Cynthia Lin. "We are in the final diligence stage for the project."

Once the Manana location opens — likely within the next two years — it is expected to draw 4,000 to 8,000 additional vehicles to the area daily. And the only way to get to the new store at the corner of Acacia Road and Kuala Street is to use Kamehameha Highway, which handles more than 40,000 vehicles a day.

But according to a signed purchase agreement, Wal-Mart will not be "required to construct or fund any offsite improvements or pay any impact or similar fees in connection with the development of the property."

City Council Chairman Gary Okino said the company has agreed to consider supporting reasonable improvements but couldn't give specifics.

"Basically they got a sweetheart deal," said Al Fukushima, chairman of the Pearl City Neighborhood Board. "Right now the community has no input. Everything is being controlled by the court."

In contrast, the city's deal with Home Depot to build its megastore on Kamehameha Highway in the same vicinity specified the company's responsibility to pay for traffic improvements to the busy intersection. Home Depot opened in July 2001 with traffic signals and two left-turn lanes.

But the city is desperate to sell the 20-acre parcel in Manana, giving Wal-Mart an upper hand in negotiations, according to officials familiar with the situation.

The deal with Wal-Mart is part of a settlement with landowner Kamehameha Schools to give the city title to property near Sandy Beach on the Ka Iwi coast.

Last February the city announced it would sell the 20 acres to Wal-Mart for $18 million. Failure to sell the parcel would scuttle the deal with Kamehameha and potentially cost the city an estimated $200 million — about one-fifth of the city's $1 billion annual budget — to complete the land exchange and preserve the rugged Ka Iwi coast from development.

"We don't want to lose the settlement," said Okino (Pearl City, Waipi'o, Shafter). "If it goes back to court, the settlement will be huge. We can't afford that."

The city will still have to sell the remaining 26 acres in Manana, turning the proceeds from the sale of the land over to Kamehameha. So far no one has expressed serious interest in the remaining acreage, Okino said.

Attorney Lex Smith, who represents the city on the land transaction, could not be reached for comment.

In comparison Wal-Mart agreed to buy 10.5 acres on Ke'eaumoku Street last May for an estimated $35 million. For its Honolulu supercenter, Wal-Mart officials have said they anticipate spending about $3 million in off-site improvements to deal with traffic, including placing utilities underground.

Traffic improvements would be small change for the Arkansas-based company that reported net sales for the five-week period ending Jan. 3 of $31.584 billion, an increase of 9.5 percent over the $28.844 billion in the similar period the year before. The uber-retailer opened 31 new stores in the United States last month alone.

"Pearl City residents are a little chagrined," said Rep. Roy Takumi, D-36th (Pearl City, Palisades). "Every other development all had long deliberations and community input and, boom, Wal-Mart just comes in and the deal is done within a week."

"I think at first blush you think, 'Why not? Now we don't have to drive so far,' " Takumi said. "But then you realize the impact it will have on traffic for the overall community."

Acacia Road is one of the main arteries leading into Manana. And that particular area of Kamehameha Highway, from Waimano Home Road to the interchange onto Farrington Highway, sees heavy traffic with Home Depot, Sam's Club, a post office and Leeward Community College.

Adding Wal-Mart would add cars — and headaches — for daily commuters.

And as immense as Home Depot is, Wal-Mart will be 10,000 square feet larger.

"For 'Aiea and Pearl City, traffic is one of the most important concerns," said Bill Clark, chairman of the 'Aiea Neighborhood Board.

"Everybody has to pass through us to get to Central and Leeward O'ahu. ... We're concerned about what's going to happen when Wal-Mart purchases the 20 acres in Manana. Traffic will become a problem.

"We asked the representatives for Wal-Mart what they're going to do about traffic. And they said they'll take care of it. I said, 'You'd better.' "

Reach Catherine E. Toth at 535-8103 or ctoth@honoluluadvertiser.com.