City puts Block J on sale

By Andrew Gomes
Advertiser Staff Writer

Advertising signs posted last weekend offer the parcel bordered by Pali Highway and Beretania, Queen Emma and Kukui streets, but city spokeswoman Carol Costa said yesterday that terms of the offering, including price and possible replacement parking, had not been determined.

"We have yet to discuss that (with the City Council)," she said. "This is very, very premature."

Listing agent Colliers Monroe Friedlander said it was recently contracted to market the property, which has mixed-business zoning that permits a wide range of use, including retail, residential, office and hotel development. The parcel is used now as a municipal parking lot.

The city property was committed in 1998 to a project proposed by Mainland developer Franco Mola and partners doing business as Block J & Associates LLC.

The estimated $150 million project called for twin 37-story affordable rental towers, 100,000 square feet of retail space and about 2,000 parking stalls, including 1,200 for public use to replace 208 metered stalls on the 2.4-acre parcel.

Under the development proposal, announced by Mayor Jeremy Harris as "good economic news," the project was expected to bring the city $8 million for development rights plus $1.4 million in annual lease rent, with the city retaining ownership of the project after the lease expired 65 years later.

But after more than two years of developer delays and changes that reduced the number of rental units from 916 to 468, the City Council called off the deal in late 2000.

Councilman Rod Tam, who represents the downtown area, said he hadn't heard about plans to sell the property. Tam said he suspects that it is being offered by the administration to help pay for city budget needs in coming years.

Costa said more information about the reason and decision for contracting to sell the property was not immediately available.

The city assesses the value of Block J at $7.7 million, although Harris said in 1998 that the land under the parking lot was appraised at almost $16 million.

Douglas Pothul, senior vice president of Colliers Monroe Friedlander, said the city-assessed value is low, but he declined to disclose a recent appraisal of the property. He said it isn't likely there will be an asking price for the parcel because that might limit what people are willing to pay.

According to Pothul, low-rise retail on an interim basis or high-rise residential are more probable uses, given the market, and there is no demand for an office tower.

"It's a great opportunity for a large block of land in an environment that seems to favor development," he said.