LEADERSHIP CORNER
Haseko Construction VP sees 'tremendous opportunity' for industry
Interviewed by David Butts
Advertiser Staff Writer
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Title: Executive Vice President
Company: Haseko Construction Inc., a subsidiary of Japan's largest condominium builder. Haseko is building 4,850 homes at Ocean Pointe in 'Ewa Beach. Choate is also president of the Business Industry Association of Hawaii.
Age: 58
High School: Davy Crockett in Conroe, Texas, north of Houston
College: Texas A&M
Little known fact: Choate was once the owner of a country-and-western music dance hall in Houston that could seat 1,500 people. The acts included Willie Nelson, Charley Pride, Merle Haggard and Conway Twitty.
Breakthrough job: After a tour in the military and a bachelor's degree at Texas A&M, Choate, then 28, was offered a managing job by a small Texas housing developer. That developer later went out of business, but not before teaching Choate how not to run a development company.
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Q. How does the high demand for new homes in Hawai'i compare to what you've seen on the Mainland over the past 30 years?
A. This is as good as I've seen it. This is really good. We are sold out to next May, and I think everybody is in the same boat. We released 26 homes last Tuesday; we were sold out before the weekend.
Q. How long will the boom in home construction continue?
A. I think Hawai'i's economy is going to be tremendous. I think people are feeling better about business. I think the business atmosphere is better. With this military privatization work (the Army contracted with Actus Lend Lease to build or renovate 7,700 homes on O'ahu), there is going to be a tremendous amount of jobs produced. We are basically going to have to double the construction workforce.
There is a tremendous opportunity in the construction industry in Hawai'i right now, and I think it is going to be there for the next 10 years until all these privatization projects are completed, and then there is even going to be more in the maintenance field, administration and management.
Q. Are you going to have to pull in workers from the Mainland?
A. They are going to have to come from somewhere. Hawai'i needs to be better at training people for vocational type work. That's what we are trying to do with the BIA. We are trying to find a new facility to incorporate some classrooms where we can joint venture with other entities to train people.
Q. Do you think the infrastructure, in particular the highways, are adequate for all the development going on in West O'ahu?
A. I don't care how many freeways you are going to build ... all you are going to do is relocate the bottlenecks. There is no way to fix traffic in Honolulu. (What must happen is) more services have to move out of downtown. They (city and state officials) all say we don't have any money. How are we going to open new offices and still provide the same level of services? I don't know. Somebody's got to be smart enough to fix that.
Q. Big Island Circuit Judge Ronald Ibarra recently ordered a halt to construction at the Hokuli'a luxury development in Kealakekua after the developer, 1250 Oceanside Partners, had already spent $190 million. The land was classified agriculture, and the judge ruled the project was not agriculture but a resort residential subdivision. What was your reaction to that?
A. I was disappointed. I'm sure they felt like they had complied with all the county ordinances and regulations. ... I'm not real familiar with the site. ... I don't know if it could produce a dollar worth of revenue. If you can't make money on it as ag land, and people are wanting houses, maybe we should take it out of ag land.
I don't know of people in our industry who advocate raping and pillaging the land. I know a lot of time builders and developers are made out to be the big bad guys.
Q. Do you think too much land is zoned for agriculture?
A. Orange County used to be 90 percent ag. It's not ag any more. Let's face it. Cities grow. Where are you going to tell people they are going to live? You tell them, "Oh, you can't have a house. You just should not have been born." You can't quit growing.
If land is truly working in agriculture, I think it should probably stay in agriculture. But there's a lot of land zoned agriculture that nobody is ever going to grow anything on.
Q. When you came in here from the Mainland six years ago, did you find it to be a level playing field?
A. I was really hoping for a level playing field when I came. I tried to treat people with as much respect as I wanted them to treat me with. ... (I said) "Let me have a little bit of time here. Let me get a track record, and I will show you how I will treat you, and I like to see how you are going to treat me."
A lot of times labor and industry, they get on separate sides. I've had a lot of discussions with a lot of people on the labor side. I tell them all the time, "You may not like it, but we are partners. Without the jobs, you've got no place to put your labor. Without the labor, I've got no one to fill my jobs." We need each other.
Q. This year only three developers entered a total of nine homes for the Parade of Homes next month. That's the lowest turnout in 40 or so years for the Building Industry Association event. Are you disappointed that more builders didn't enter?
A. Yes, but they're sold out. I think this year is just weird timing. A lot of people are out of inventory, and they don't have any new product to show.
Q. Is all this demand coming from Mainland families moving here?
A. We sell to a lot of Mainland buyers. Some are second homes. Some are buying to retire in a couple years. They want to go ahead and buy their house now, maybe rent it out, maybe let it sit empty. We have people come in the sales office all the time and say, "Do you have anything I can move into in 45 days?" We say, "I'm sorry, sir." They say, "Well, nobody else does either." It's terrible to be in that position.
Q. Will that kind of demand continue?
A. The market has been driven by two things: tremendous pent-up demand and then low interest rates. I think the pent-up demand is still there, and I think it is going to be even accentuated by the fact that a lot of people who bought their houses in the late 1980s, when the costs were relatively high, those costs have come back. They are able to move without taking a bath on their old house.
I don't think interest rates are going to go too wild until the economy starts to overheat, and I don't see that on the near horizon. I think it's struggling at best, especially after the terrorist attacks and with the war on terrorism.
