Home Depot moves closer to Hilo goal
By Kevin Dayton
Advertiser Big Island Bureau
Home Depot wants to lease land that has just become available behind Hilo's Prince Kuhio Plaza and intends to have a new Hilo store open next year, a company executive said yesterday.
A Hilo outlet would be the sixth Hawai'i store for Home Depot, the world's largest home-improvement retailer. The company now has two stores on O'ahu, one in Kona, one on Maui and one under construction on Kaua'i that is scheduled to open this summer.
"Our customers in the Hilo market have told us they want us there now, so we're just trying to get it open as soon as we can," said Jeff Nichols, director of real estate for Home Depot's West Coast division.
"We're disappointed we're not open now."
Nichols said the prototype Home Depot store today is 102,000 square feet, and cost about $10 million to build. The stores usually employ 175 to 225 people, depending on the volume of sales, he said.
The state Department of Hawaiian Home Lands announced this week that it is seeking tenants for about 11 undeveloped acres along Maka'ala Street in what is now the retail hub of Hilo.
Already on one side of Maka'ala is the Prince Kuhio mall anchored by Sears, while across Maka'ala is the Waiakea Center with Wal-Mart, Borders Books, Music & Cafe, OfficeMax and other stores.
If the company is successful in leasing the Maka'ala Street property, Nichols said, Home Depot would use the entire property for its own operation rather than subleasing space for other stores.
"We had hoped to have that store open by 2003, but it looks like it won't be until 2004," Nichols said.
Home Depot approached Hawaiian Homes officials last fall about leasing the 11-acre parcel, which is already zoned for commercial and light industrial uses. A spokesman for the department said no other bidders have expressed interest in the property yet.
An invitation to potential tenants published by Hawaiian Homes this week specifies the department wants to lease out the land for at least 25 years, and wants a minimum ground lease rent of $237,000 a year for the first 10 years. The minimum annual lease rents would then be increased in steps until the minimum rent in 20 years would be about $315,000.
The ground leases under the Prince Kuhio Plaza and the Waiakea Center are the most lucrative in the Hawaiian Homes inventory, with the Waiakea Center alone earning almost $1 million in lease rent for the department last year.
The practice of leasing out lands to non-Hawaiians for commercial purposes has been criticized by some Hawaiian activists, who believe homelands should be reserved for housing for Hawaiians.
But Hawaiian Homes officials say the money from those commercial leases is used to finance roads, water lines, sewers and other improvements needed to support home construction elsewhere.
Micah Kane, chairman of the Hawaiian Homes Commission, said the department intends to press ahead with additional commercial leases in the Hilo area. This latest lease will help to do that by installing some of the necessary improvements. He declined to say exactly which other parcels the department is considering for new commercial leases.
"We really feel it's a good project," Kane said. "I feel it's a win-win for the department and the community. It will generate the funds for us to expand our homes-building capabilities on that island."
