Relatively few people can say they live next door to the world's largest retailer. But in urban Honolulu, Wal-Mart and its affiliate Sam's Club are moving into a dense community of residents and businesses who never imagined the big-box giants would become their neighbor.

As massive steel beams and concrete forms rise, the double-decker stores and 1,700-stall parking structure are taking shape, but it is uncertain how the neighborhood will be transformed.

"I can't foresee all the consequences," said Thomas Lin, a neighborhood board member who can see the retail development from the hallway of his 18th-floor Wood Rose condo a block away. "Impact? It's hard to predict."

Like many area residents and businesses, Lin is aware of completed traffic studies and coming street improvements by Wal-Mart, yet he fears gridlock created by several hundred vehicles traveling to the new stores scheduled to open early next summer.

Community members, including small businesses, also are torn between having an influx of more consumers to the area, competition from the big-box giants and the convenience of buying discount and bulk merchandise.

Walk anywhere a block or two from the massive construction site and there are mixed feelings from the mixed-use neighborhood where 60,000 or so people live within a mile of the new home of Wal-Mart and Sam's.

The community is a jumble of residential walk-ups, single-family homes and high-rise condos mingled with office buildings, stores, restaurants and numerous hostess bars. The area, known as the Sheridan Tract, even has a temple, a milk-processing plant and a couple of hotels.

Right in the middle of it all, on a 10.5-acre site known as the "Ke'eaumoku super- block," the Wal-Mart and Sam's superstructure is rising.

The project, announced three years ago, has withstood opposition from union organizers and residents who led protests, challenged government approvals and filed a lawsuit to stop the project.

The discovery this year of more than two dozen sets of human remains on a corner of the work site is not expected to stop the project, though Wal-Mart and the state are working to either move the remains or keep them in place with a memorial.

Wal-Mart, which said it is committed to becoming "an integral part of the neighborhood," projects a peak of 450 additional vehicles an hour entering the project on weekdays and 780 on weekends, and has not yet decided whether to operate 24 hours.

Shopping zone

The city Planning and Permitting Department concluded the two stores with 317,000 square feet of combined space will not alter the character of the area.

Retail analysts said the area is already a shopping zone with Ala Moana Center, Victoria Ward Centres and other nearby retailers, and that the addition of so much discount and bulk merchandise sold by Wal-Mart and Sam's will fortify the core and satisfy almost any need of O'ahu shoppers.

"That's the hot spot, and everybody is trying to put their stake down somewhere," said Daniel Lim, chief operating officer of Korean foods retailer Palama Super Market, which is building a store four blocks away from the Wal-Mart project.

"For us it was a no-brainer," Lim said, explaining that the store fits perfectly in a community with the highest concentration of Korean residents on the island.

Wal-Mart also will cater to the neighborhood's demographics by carrying more Asian foods than it does at its Mililani or Kunia stores, because 75 percent of the people who live within three miles of the superblock are Asian.

"With every store we try to be the store of the community, reflecting customer tastes and what people who live in the community want," said Cynthia Lin, Wal-Mart spokeswoman.

But she said Wal-Mart is not going to carry the wide array of Asian foods sold three blocks away at Daiei.

Retail analysts said Daiei and other nearby retailers, including Longs Drug, Sears, Ross Stores and Foodland Super Market will be particularly challenged by Wal-Mart and Sam's. Other observers point out that Longs and the others have lots of experience with big-box competition.

Ross district manager Jim Radtke said Wal-Mart doesn't focus on name-brand merchandise like Ross, which he expects to benefit from more shoppers drawn to the area.

City Councilwoman Ann Kobayashi, who represents the area, said she is concerned the merchandising power of Wal-Mart and Sam's will drive out smaller businesses, a frequent criticism of big-box retailers.

Yet, on a tour of neighborhood stores, Kobayashi said she didn't find any retail operators who expressed fear for their survival because of Wal-Mart and Sam's.

Wal-Mart's Lin said the discounter and Sam's have an overall benefit on small business because the smaller companies buy from and also sell to the two giant retailers. According to John Cruz, general manager of the Pearl City Sam's, 60 percent of customers are businesses.

Survival of competitors

Most competitors, Lin said, historically have not only survived but thrived because of increased consumer traffic.

Dwight Yoshimura, Ala Moana Center general manager, said that while sales for some mall merchants may drop, increased shopper traffic from Wal-Mart and Sam's should have a positive result. "It's clearly a stronger attraction point for people to come to the area to shop," he said.

Kazi Foods, which recently remodeled its KFC restaurant a block from the Wal-Mart project, expects a 10 percent to 15 percent increase in sales when its new big-box neighbors open.

Bill Trang, owner of the 6-month-old Green Papaya Cafe across the street, likewise hopes shoppers looking for value merchandise will stop at his Vietnamese and vegetarian restaurant across from Wal-Mart and Sam's. "Right now (business is) a little slow," he said.

L&L Drive-Inn plans to close its restaurant several blocks away on Young Street and move closer to Wal-Mart — leasing a second-story space connected to Sam's.

L&L President Eddie Flores Jr. predicts the new location will be the second-busiest for the 74-restaurant chain, behind the 24-hour L&L at the Airport Trade Center. "We're excited," he said.

More congestion

While merchants welcome increased consumer traffic, many residents regard that as further congesting their lives.

"It's going to be nasty," said Jack Doughty, who already is testy because of construction vehicles from the Wal-Mart project rumbling down Pi'ikoi Street next to the 12-unit building he lives in.

"It's bad enough every two minutes with the light change," he said. "All day it's noisy. I cannot wait for the traffic (increase). They better have a good plan."

One of Doughty's neighbors, who didn't want her name used, said she doesn't mind the traffic and noise. "If you like it to be nice and quiet, go out in the country and live," she said. "I love (the Wal-Mart project). I don't have to go to Kunia. Bring it on."

Benay Orso, who lives a couple low-rises away from Doughty on Makaloa Street within view of the superblock, said tire screeching from cars parking in the adjacent office building bother her more than Wal-Mart and Sam's, where she has applied for a job.

"It doesn't bother me," she said. "Progress doesn't bother me."

Area resident Betty Becker, however, views the change as unfortunate, and calls the Wal-Mart project a "monstrosity."

Becker, whose husband, Jim, organized a 1,300-member community group that tried to stop the retail project, laments how much of the neighborhood has evolved since the couple bought their Wood Rose unit in 1966.

At the time, the Wood Rose was only the second high-rise in the neighborhood, said Becker, who recalls unobstructed views from Manoa to Wai'anae. After spending the 1970s in London, the Beckers returned home to more high-rise apartments, dense commercial buildings and traffic.

The ugliest building in Honolulu, Becker said, is the dark 18-story Pacific Guardian Tower built in 1989 just makai of the superblock.

Despite the area's strong urban feel, Kobayashi said Wal-Mart and Sam's are going to change the essence of the neighborhood more than other businesses.

"People say it's an urban area, but there are a lot of people who live around there," she said. "It still has a flavor of a neighborhood."

The way Wood Rose resident Lin sees it, something big was going to be built on the superblock, and he isn't sure previous proposals were preferable to the Wal-Mart development.

Haseko (Hawaii) Inc. in the late '80s proposed building 400,000 square feet of retail plus 200,000 square feet of offices plus 440 residential units and a 4,000-stall parking structure on the site. Haseko in a separate plan tried developing a 515,000-square-foot shopping center with a 20-screen theater.

More recently, Kmart agreed to buy the property and build a 186,000-square-foot Super Kmart Center with a full grocery section and 24-hour operation, but backed out of the deal after filing for bankruptcy.

"What can you say?" Lin asked. "That (property's) been empty for years. Something's got to go in there."