Uprooted and unsure
|||Displaced merchants have few options|
By Dan Nakaso
Advertiser Staff Writer
By the end of this month, the Rev. Mel Morishige and the members of his Honolulu Church of Light need to vacate their A-frame, Kapi'olani Boulevard building and find a new home in the tightest retail rental market in eight years.
Morishige always feared this day would come.
For years, the bars, noodle shops and other storefronts along the makai side of Kapi'olani Boulevard between Ke'eaumoku and Kaheka streets have been told they might be displaced to make room for Hawai'i's first full-line Nordstrom store, adjacent to Ala Moana Center.
The uncertainty provided a temporary cocoon that offered the businesses favorable leases that protected them from rising commercial rents along and near the busy Kapi'olani corridor.
Then, six to nine months ago, landowner General Growth told the tenants that it would implement the redevelopment clauses in their leases, said Jeff Dinsmore, vice president of development for the Hawai'i region for General Growth, the company that owns Ala Moana Center. Construction on the new Nordstrom site is due to begin early next year."There were a lot of tenants that were in there on a month-to-month basis," Dinsmore said. "With others, their leases expired and we didn't renew them, so they were on month-to-month."
But now, with the Oct. 31 deadline to vacate approaching, the handful of businesses that remain face the cold reality of Honolulu's commercial market.
"We're really scrambling to find a place," Morishige said. "We're looking every day."
After visiting warehouses, professional office buildings and other spaces from 'Aina Haina to Kalihi, Morishige feels he will be lucky to find even a 1,000-square-foot site to replace the 6,000-square-foot building and 26 parking stalls the Honolulu Church of Light has used for the past six years.
"Those tenants have been on month-to-month for quite a long time, as Ala Moana has been developing the Nordstrom project," said Jeffrey W. Hall, senior director of research at CB Richard Ellis Hawaii Inc. "It seems that several of them have been in decline, waiting for the inevitable demise. Some of them are expected not to continue. The others will be faced with an ever-tightening market and rents that are much more painful than what they are paying now."
As they head out in search of new places, the business owners and other tenants have been unable to find comparable-sized locations at comparable prices.
Some have chosen to shut down, as has the Last Sanctuary comic-book shop, which will close Saturday, according to co-manager Anthony Akahoshi. The landmark Bakery Kapiolani will move operations to its 'Aiea store after today, disappointing its many customers, including the hundreds who gorged themselves on the custard pies and long johns that were on sale all last week.
Others already have found new spots nearby. But for Taiyo Noodles, rent in the new location is 50 percent higher, co-owner Sun Lee said.
"Way more rent," she said.
The nearby So Gong Dong Korean restaurant will shutter its 800-square-foot site on Oct. 29 and reopen in early November in a 3,000-square-foot spot in the McCully Shopping Center.
But So Gong Dong's new rent of $12,000 a month will be "three times more than now," owner Steve Lee said.
"It's a little bit too big for me," Lee said. "But I couldn't find a proper-sized place."
Lee plans to raise prices slightly to help cover his higher rent, but "I know that people who live in Hawai'i, live in Honolulu, are hard-working people, so I cannot raise too much. Maybe a little bit."
The campaign headquarters of U.S. Rep. Neil Abercrombie, D-Hawai'i, was to move this weekend to the second level of Ward Warehouse, near the shopping center's conference rooms — far from retail foot traffic.
The rent will stay about the same as it was at the old Kapi'olani Boulevard storefront that served Abercrombie through three successful elections, said Bill Kaneko of the Abercrombie campaign.
But the Ward Warehouse site has about half the square footage.
"For our purposes we wanted something visible and storefront and with parking," Kaneko said. "We looked everywhere. ... But we couldn't find anything that was affordable and had all those things. So now we're going to be on the second floor of Ward Warehouse, where no one can see us. At this stage of the game we have no other choice."
The departures along Kapi'olani Boulevard are the result of Seattle-based Nordstrom's 15-year search for a location for a full-line Hawai'i department store. The company plans to break ground on its 200,000-square-foot, three-level store in late January, said Nordstrom spokeswoman Brooke White.
Nordstrom hopes to open the new store in spring 2008 and fold in the Nordstrom shoe store located at Ward Centre. Nordstrom's nearby clearance outlet, Nordstrom Rack, will remain at the Ward Centers.
While the old storefront businesses have to be out this month to make way for demolition in December, their neighbors on the mauka side of Kapi'olani Boulevard wonder what two years of construction will mean to them.
"We've been hearing about it for years that Nordstrom's might open up across the street," said Barbara Schroeder, the owner of Nevada Bob's Golf. "It's great that we're getting a Nordstrom here — as a shopper. But as far as the impact on us, of course I'm concerned, because I don't know what to expect. Anything that disrupts traffic along Kapi'olani impacts us."
Morishige knows the Honolulu Church of Light won't be part of whatever happens next along Kapi'olani Boulevard.
The church's last service at its current site will be held next Sunday. By then, Morishige hopes to have found a new home for the church's 150 members.
But it's hard not to be discouraged.
Morishige has looked at buildings that lacked adequate air conditioning. There were plenty of spaces that were inaccessible to the church members who rely on walkers and wheelchairs.
None had anything close to the church's current 26 parking stalls. At this point, Morishige said he will feel lucky to find a site that could accommodate even the 12 parking spots the church needs for its staff and regular volunteers.
"There is nothing like what we have here, nothing even close," he said.
But rather than focus on the negative, Morishige prefers to reflect on the cheaper rents and larger space the church has enjoyed over the past six years of uncertainty.
"We're just counting our blessings that we've had this place this long," Morishige said. "What we advocate is no frustration — just trusting that everything is guided for us. So we're just taking the journey."
Reach Dan Nakaso at email@example.com.