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The Honolulu Advertiser

Posted on: Friday, April 30, 2004

Condo in plans for Hobron purchase

By Andrew Gomes
Advertiser Staff Writer

An affiliate of Outrigger Hotels & Resorts has sold a vacant Waikiki property to a California firm with plans to develop an upscale high-rise condominium. The move came after a local nonprofit, hoping to build a senior-living facility on the Hobron Lane site, backed out.

Irongate Capital Partners, a Beverly Hills-based investment and development firm, recently bought the 3-acre site for $15.5 million, and said it is drawing up plans to build a high-end condo tower.

Rick Rosenberg, Irongate president, said he is hopeful the firm can begin sales in the next three to six months, and break ground in about a year.

"We're putting all of our ducks in a row," he said. "We're moving forward right now."

Rosenberg said the Hobron purchase is the firm's first in Hawai'i, where Irongate had been looking at real estate opportunities for about six months.

Irongate's project enters a swelling field of condo high-rises in the works, including two others in Waikiki and four more in nearby Kaka'ako with more than 1,500 units coming on the market that is also flush with demand.

The Irongate site is one of four contiguous parcels once promoted as a home for the Convention Center. Outrigger put the parcels up for sale in 2000 to help raise cash for reinvestment in its core resort properties.

Outrigger sold two of the parcels containing the 136-unit Ohana Ala Wai Towers hotel and 47-unit Ala Wai Terrace apartments three years ago to local developer Peter Savio.

A third parcel, containing the 144-unit leasehold apartment building Tradewinds Mauka, has yet to be sold.

Before Irongate bought the vacant 3-acre parcel, it was sold in January 2003 for $13 million to Honolulu Neighborhood Housing Services Inc., a nonprofit that partnered with local developer Donald Graham and planned to build a 26-story, $113 million apartment tower for up to 275 seniors.

Graham acquired the property after an unsuccessful effort to develop the retirement complex on part of the Ke'eaumoku superblock on which Wal-Mart is building Wal-Mart and Sam's Club stores.

Rep. Dennis Arakaki, who is executive director of Honolulu Neighborhood Housing, said the nonprofit had state authorization to sell $80 million in special-purpose revenue bonds to help finance the project, but financing could not be completed.

"There was a lot of interest in (the project), but the financing just didn't come through," he said. "It's too bad."

Honolulu Neighborhood Housing sold the parcel back to Outrigger in February for the same price it paid. Arakaki said the nonprofit, which focuses on developing low-income rental homes, had hoped the senior-living project would generate income to further its main mission, but that there are no prospects to revive the project.

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