Wal-Mart reaches deal for Pearl City property

• Sam's may sell gas in Pearl City

By Andrew Gomes
Advertiser Staff Writer

The city recently cleared the way to sell a Pearl City property to Wal-Mart for $18 million by resolving issues over responsibility for area traffic improvements that had delayed the sale for about a year.

On Tuesday, Wal-Mart received building permits for the 140,000-square-foot store to be built on a 20-acre site across the street from Pearl Highlands Center, where the company operates a Sam's Club.

Store construction should begin in late June or July, with a projected opening in the first quarter of next year, a Wal-Mart representative said.

"We are certainly pleased that this project is going to move forward," said company spokeswoman Cynthia Lin.

An amended sales agreement, negotiated by both sides since last July, calls for Wal-Mart to make a host of off-site improvements estimated by the retailer to cost $2 million. The city will pay Wal-Mart $1.2 million for its share of the work, some of which was planned before Wal-Mart offered to buy the parcel.

Jon-Eric Greene, a senior vice president with local real estate firm Colliers Monroe Friedlander who helped represent Wal-Mart, said city officials concluded that the work, if done by the city, would cost considerably more than $2 million and take four years because of procurement rules.

"We felt we could do it in a much more timely manner and for less," Greene said.

City officials familiar with the issue could not be reached for comment yesterday or the day before.

Among the improvements Wal-Mart is to make:

• Installing a traffic surveillance camera, improving right-turn access and modifying traffic signals at Acacia Road and Kuala Street.
• Installing signals and traffic surveillance cameras at the Kuala-Pepei and Kuala-Makolu intersections.
• Modifying signals and lane striping at Waimano Home Road and Kamehameha Highway.

The agreement stipulates that these improvements have to be complete within 18 months after the store's opening.

Wal-Mart also must widen Acacia Road to create a left-turn lane into the northern Pearl Highlands Center driveway within the same time frame, or the city may do the work and receive a $400,000 refund.

A new right-turn entrance into the Wal-Mart property between Pepei and Makolu streets also will be made by the company.

One optional improvement is widening Kamehameha Highway to add a right-turn lane onto Acacia Road, and widening Acacia to add two left-turn lanes and a shared right-turn/through lane onto Kamehameha Highway. This work, which also involves restricting access to right turns into and out of the post office, is subject to approval from the U.S. Postal Service and the state.

Area traffic, which certainly will increase with the opening of a Wal-Mart, has been a concern of the community as well as the retailer.

Councilman Gary Okino, who represents the area, was traveling yesterday and unavailable for comment. But he and the other council members last month voted to support the amended agreement.

Albert Fukushima, chairman of the Pearl City Neighborhood Board, said he preferred to reserve comment on the traffic solutions until he receives detailed plans from city or Wal-Mart officials.

Wal-Mart expects to meet with community groups later this month and next month. Under the agreement, Wal-Mart also will conduct a traffic study a year after completing the improvements, and make any necessary modifications.

Other terms of the agreement call for Wal-Mart to construct a city access road and provide electric cabling along parts of Kuala and Makolu streets. The company also will contribute $60,000 to help the city demolish existing warehouses on the property.

The purchase, which was originally agreed to in April 2002 and modified once to extend the sale deadline, is expected to be completed within 90 days.

The sale is part of a settlement with landowner Kamehameha Schools and developer Maunalua Associates, which agreed to take $5.4 million plus proceeds from the city's sale of 46 acres at Manana in return for property near Sandy Beach on the Ka Iwi Coast.

Failure to complete the Wal-Mart transaction would scuttle the lawsuit settlement and potentially cost the city an estimated $200 million to complete the land exchange and preserve the coast from development.

The city is preparing to hire brokers to market the remaining Manana property, which also would be subject to approval by Kamehameha Schools and Maunalua Associates.

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

Sam's may sell gas in Pearl City

A second big-box retailer may get into the discount gasoline retailing business on O'ahu, as Sam's Club considers opening a gas station in Pearl City.

The members-only retailer is looking at developing a gas station on a piece of nearby Manana property being bought by Wal-Mart, which owns Sam's Club.

Wal-Mart plans to build a store on the 20-acre site near the Sam's Club at Pearl Highlands Center and has four small parcels available for other uses.

Rodney Arias, co-general manager of the Sam's Club at Pearl Highlands, said the company is considering the prospect of a gas operation on the Wal-Mart site but has not made a decision.

Bob Mcadam, a Wal-Mart spokesman in Arkansas, said Wal-Mart and Sam's Club are always looking at opportunities to expand gas operations but there are no firm plans to sell gas in Hawai'i.

If Sam's Club decides to sell gas at the Pearl City site, it would join rival discount retailer Costco, which has two stores on O'ahu selling gas typically anywhere from a few cents to 20 cents less than what other stations charge.

Albert Fukushima, chairman of the Pearl City Neighborhood Board, said residents have expressed to Wal-Mart officials a desire for a discount gas station.

"It would be attractive to people," said Fukushima, who fills the family car with gas at Costco whenever he's in Waipi'o or Iwilei where Costco has its stations. "It's really tremendous savings, especially with gas prices going up."

Fukushima, whose wife is a Sam's Club member, also noted, however, that there could be traffic concerns with a high-volume station at Manana.

Jon-Eric Greene, a senior vice president with local real estate firm Colliers Monroe Friedlander who is working with Wal-Mart on the Manana deal, said Wal-Mart is interested in selling three roughly 1-acre pieces of the property to interested restaurant or retail operators.

Fukushima said restaurants are also on the community's wish list.

Sam's Club and Wal-Mart, which have about 3,500 stores, have 1,002 gas station operations. Sam's Club, which has 270 stations, owns and operates its stations. Wal-Mart, which has 732 stations, finds gas company partners to own and operate stations at Wal-Mart stores.