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The Honolulu Advertiser
Posted on: Friday, March 28, 2003

2 'Aiea shopping centers head toward auction

 •  'Aiea yearns for sense of community

By Andrew Gomes
Advertiser Staff Writer

Two 'Aiea shopping centers next to Pearlridge Center are heading toward auction as part of a foreclosure suit brought by GE Capital Hawaii against the owner of Pearl Kai Shopping Center and Westridge Center.

Westridge and Pearl Kai owner Pearl Kai Corp. in January defaulted on about $20 million in loans made by GE Capital, according to a lawsuit filed by the lender last month.

GE Capital, in a filing earlier this week, said Pearl Kai Corp. has not disputed its delinquent debt, and asked a Circuit Court judge to appoint a receiver to oversee management of the centers and sell them. A hearing is set for April 15.

GE Capital made loans totaling about $24 million to Pearl Kai Corp. and Japan-based Tokai Rayon Co., to acquire the centers.

Tokai Rayon paid $13 million for Westridge along with $23.5 million for Pearl Kai in 1989. Records show Pearl Kai Corp., whose sole officers Seiko Goto and Joe N. Nakabayashi were managing directors of Tokai Rayon, acquired the centers in 1991.

Attorneys and officials with Pearl Kai Corp. and GE Capital could not be reached yesterday.

Local retail and real estate analyst Stephany Sofos said of the two centers: "Back when they were built (in the mid-'80s) they were hot properties ... everybody was trying to get into 'Aiea. But since the first Gulf War, then the 9/11 terrorist attacks and now another war, retail business has declined. There's lots of vacancy."

It was unclear yesterday how much space at Westridge and Pearl Kai is vacant. Managers of the properties could not be reached.

Westridge has 61,000 square feet of space with tenants including Tony Roma's, Eastern Garden and Buffet 100. Pearl Kai has about 80,000 square feet with tenants including Tower Records, Cheapo Music and Jiffy Lube.

Sofos said buyer interest for the centers, which are on leasehold land, will largely depend on lease terms, especially for an investor "in today's market."

The state owns the land under Westridge. Kamehameha Schools is landlord for Pearl Kai Center.

The city, for property tax purposes, values Westridge excluding land at $5.9 million; it values Pearl Kai excluding land at $9.3 million.