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The Honolulu Advertiser
Posted on: Friday, May 16, 2003

Home Depot, Ace stores to open in Kapolei this year

By Andrew Gomes
Advertiser Staff Writer

It has been 13 years since the groundbreaking of Kapolei, and now O'ahu's "Second City" is getting not one - but two - home-improvement retailers.

Home Depot and Ace Hardware plan to build and open adjacent stores by the end of the year, establishing close-range competition in the growing West O'ahu community that has long desired a home-improvement shopping outlet.

Atlanta-based Home Depot, the nation's largest home-improvement retailer, reached an agreement yesterday to buy 12 acres of property on which to build a 135,000-square-foot store.

Ace, owned by Wahiawa-based Pioneer Ace Hardware, a member of the nation's second-largest hardware-buying cooperative, recently began site work on a 2-acre property where it plans to open a 15,000-square-foot store.

Purchase prices were not disclosed for the parcels, which were carved from the largest remaining undeveloped site in Kapolei's first commercial phase between Farrington Highway and Kamokila Boulevard near Big Kmart and the Kapolei Entertainment Center.

Theresia McMurdo, a spokeswoman for Kapolei master developer Campbell Estate, said both retailers were aware of the other's plans. "They apparently believe the market is strong enough for them to coexist," she said. "It's really a good market for them. Retailing's been booming in Kapolei."

Representatives of Home Depot and Pioneer Ace did not respond to calls yesterday seeking comment.

Home-improvement and hardware supplies have been one major retail business that has been absent in Kapolei, which is home to about 160 companies and government agencies, roughly 22,000 homes and more than 69,000 residents.

"Kapolei's coming around," said Steve Sofos, president of Sofos Realty Corp., which is involved in retail leasing in Kapolei and represented Pioneer Ace in acquiring its site.

"It's been a slow, long process."

The area underwent a growth spurt last year, when $475 million was invested in the region that has received $1 billion of total public and private investment to date, according to Campbell Estate.

Commercial additions last year included the 65,000-square-foot Marketplace at Kapolei, which added about 35 retailers and restaurants in November, and initial work on an $82 million printing plant by The Advertiser.

Hundreds of homes continue to be built in the greater Kapolei area stretching from the 'Ewa plain to Ko Olina, and developers plan another roughly 29,000 homes over the next decade or more.

"That's how you build a city - you just add to it," McMurdo said.

The coexistence strategy of the home-improvement retailers is expected to focus on exploiting different strengths, weaknesses and niche markets.

The smaller Ace stores have concentrated on customer service and convenience while trying to stay competitive in pricing. Some Ace stores have diversified to carry merchandise such as automobile radiator hoses and spark plugs, boat bilge pumps and life jackets, and camping stoves and sleeping bags.

McMurdo said Pioneer Ace plans to lease out 7,000 square feet of additional space at its Kapolei store to another user or users.

Pioneer Ace owns and operates Ace stores in Wahiawa, Waipahu, Hale'iwa and La'ie. The Kapolei location, the company's fifth, would join about 30 other Ace stores in the state.

All Ace stores are members of Ace Hardware Corp., an Oak Brook, Ill.-based cooperative collectively owned by about 5,000 independent retailers with $13 billion in annual sales.

A typical Home Depot store prices its merchandise to appeal to do-it-yourselfers, contractors and other home-improvement professionals. The stores typically stock 40,000 to 50,000 items, cost about $10 million to build and employ 175 to 225 people.

Home Depot has four stores in Hawai'i, including two on O'ahu. The first, a 145,000-square-foot store, opened in 1999 in Iwilei, followed by a 130,000-square-foot Pearl City store that opened in 2001 after a Maui store.

The home-improvement giant, which had $58 billion in sales last year, recently started store construction on Kaua'i, its fifth Hawai'i location, and hopes to build a store in Hilo, which would be its seventh Hawai'i location after Kapolei.

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