Mauna Lani work to begin in May
By Andrew Gomes
Advertiser Staff Writer
After three years of delay, a $37 million retail center planned at the Mauna Lani Resort on the Big Island's Kohala Coast is scheduled for construction May 15.
Architects Hawaii Ltd. rendering
And a major addition to the well-established Kings' Shops nearby at Waikoloa Resort is expected to soon follow, after a similar delay.
The Sept. 11 terrorist attacks set back plans to open the Mauna Lani Resort retail center and halted an expansion at the nearby Kings' Shops. Recovering tourism and a pickup in residential building in the area helped put both projects back on track.
The two resort retail projects were derailed by the Sept. 11 terrorist attacks, and have taken unexpectedly long to rebound compared with the recovery of tourism and residential real-estate sales in the area.
"It was a quick ride down and a long slog back up," said Mark Richards, president of Kona-based developer Maryl Group, which partnered with Eugene, Ore.-based real-estate investment firm Spring Capital on The Shops At Mauna Lani.
Richards said he has enough lease commitments to finish financing the 75,000-square-foot project, including agreements with Maui restaurant Longhi's and a Tommy Bahama combination retail store and restaurant.
Other tenants with lease agreements representing 70 percent of available space include women's apparel retailer Chico's and affiliated retailer White House/Black Market, Richards said.
Some of the signed leases are nonbinding because of the construction delay, but Richards said the project is certain to move ahead with construction May 15 with the committed tenants.
"We're still excited about being on the Kohala Coast," said Kim Krieg, an Arizona real-estate consultant representing Tommy Bahama. "We are putting the finishing touches on our lease."
Skittish tenants force delay
Plans for the Mauna Lani center were announced in late 2000 and stores were projected to open in December 2001. But after a delay and then the Sept. 11 attacks, the project was left with lease commitments for only 50 percent of the center, which needed to be at least 65 percent leased to start construction, Richards said.
"It's taken a lot longer for the retailers to get comfortable," he said. "It took a heck of a lot longer than we had hoped."
Kings' Shops, developed by Waikoloa Land Co., suffered a similar setback with its planned expansion that was publicly announced in March 2001 and initially expected to open last summer.
"All the tenants became cautious after Sept. 11," said Alan C. Beall, a limited partner and leasing agent for Kings' Shops. "We kind of felt that way, too, and pulled back our horns. Now we're moving full blast."
The Waikoloa project calls for a 55,000-square-foot retail complex with an outdoor amphitheater and gourmet supermarket across from the existing 75,000-square-foot center, which will be expanded by 20,000 square feet.
Beall said construction should start toward the end of the year and be finished toward the end of next year.
Tenants have yet to sign leases for the Kings' Shops additions, but Beall said signed leases aren't required to begin construction. Prospective tenants were not disclosed, though Beall said the shopping center, which is 100 percent occupied, has a waiting list to work from.
The Mauna Lani and Waikoloa projects have competed for tenants, such as Tommy Bahama, but some analysts expect the centers can successfully coexist.
"I don't think that's an issue," said local retail consultant Stephany Sofos of SL Sofos And Co. "The Kona-Kohala Coast is the fastest-growing area in the state of Hawai'i. The opportunity is so great, the tenants want to be there."
Sofos said the key for the Mauna Lani center will be to draw consumers using strong tenants because Kings' Shops is bigger and better established with about 50 tenants, including Roy's Waikoloa Bar & Grill, DFS Galleria, a Macy's boutique and Louie Vuitton.
"People go to the Kahala Mandarin from all over the Island to eat at Hoku's, and the same thing will happen at the Shops At Mauna Lani if they have the right tenant mix," she said.
Home building key
Joseph Toy, president of local visitor industry consultancy Hospitality Advisors LLC, said the extent of retail at the Waikoloa and Mauna Lani resorts is unusual for master-planned resorts, which typically don't have much.
Toy said the Kohala resorts, unlike Waikiki and resorts on Maui, are far from residential communities with supporting retail and entertainment, so they are providing it themselves for hotel guests, residents and the rapidly growing population of wealthy vacation-home owners.
"The continued (residential) development — that's what's driving a lot of the market along the Kohala Coast," he said.
The number of homes within Waikoloa Resort have increased from about 400 in early 2001 to 680, a resort spokeswoman said.
At Mauna Lani, one residential project called Pauoa Beach has sold 38 of 46 lots for $65 million in just under a year, including one to sitcom star Kelsey Grammer of "Frasier" and his wife, Camille.
Maryl is selling about two homes a week for about $1.5 million each at The Villages, a 130-home project at Mauna Lani. Other growth is taking place from Hualalai Resort in the south to Mauna Kea Resort in the north.
"We're excited what's going on on the Kohala Coast," Richards said. "It's amazing."
Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.
