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The Honolulu Advertiser
Posted on: Saturday, April 1, 2006

Costco checks Kapolei for fourth O'ahu outlet

By Andrew Gomes
Advertiser Staff Writer

Costco Wholesale has identified a prospective site in Kapolei for a fourth store on O'ahu, joining a rush of retailers and real-estate developers interested in building up the burgeoning "second city" with more shopping options.

Bruce Greenwood, a Costco senior vice president, said the company has identified a site and is studying whether a 160,000-square-foot store with a gas station would be feasible.

"We're kind of in the early stages right now," he said. "We're not sure if it's viable at this point."

Greenwood said it would be premature to identify the site, adding that two other sites in Kapolei are possible for a store.

Dave Rae, a spokesman for Kapolei master developer and landowner Campbell Estate, confirmed discussions with Costco, but said it would be premature to comment further. He said Costco has not bought land from the trust.

The Issaquah, Wash.-based retailer is expected to make a presentation in April or May to the Makakilo/Kapolei/Honokai Hale Neighborhood Board, according to board chairwoman Maeda Timson, who said she has had a preliminary discussion with Costco.

Timson said she anticipates significant community support for Costco because the nearest store for the members-only retailer selling discount bulk merchandise is in Waipi'o. Also the primary site she said Costco is considering wouldn't dramatically worsen traffic around Kapolei Shopping Center and the Farrington Highway-Fort Barrett Road intersection.

Timson said Costco's prospective site is a more than 13-acre parcel south of Home Depot and diamondhead of The Honolulu Advertiser's printing plant. The site provides direct access from the H-1 Freeway via the Campbell Industrial Park exit as opposed to the more heavily used Kapolei exit connected to Fort Barrett Road, and therefore wouldn't funnel Costco shoppers through Kapolei's often congested commercial core.

"I think it's going to be a positive thing because the traffic situation is not that dismal," she said. "Everyone's biggest gripe is getting through the Kapolei Shopping Center (area)."

If Costco opens a Kapolei store, it would be the company's fourth on O'ahu, joining Iwilei, Waipi'o and Hawai'i Kai locations. The company also has one store each on the Big Island and Maui, and recently bought land on Kaua'i to build a store that could open this year.

Costco would be one of the biggest retail draws in Kapolei, which has only two big-box retailers, Home Depot and Big Kmart, as well as several dozen smaller stores and restaurants primarily in two shopping centers with a combined 200,000 square feet of space.

The relatively sparse retail options in Kapolei are partly a product of the economic downturn that swept the state for nearly a decade after the planned second city envisioned as an alternative population center to Honolulu broke ground in 1990.

More recently, however, retail development plans have picked up because of the strong economy and residential growth.

Campbell Estate has plans to develop 2,370 homes and a golf course on the outskirts of Kapolei. Schuler Homes plans 1,150 homes in the heart of Kapolei. And Castle & Cooke plans to build almost 500 homes at the Villages of Kapolei.

Neighboring Ko Olina Resort & Marina has several condominium and time-share projects under construction, while the nearby residential communities of Makakilo and 'Ewa Beach also are growing.

Local developers The MacNaughton Group and Kobayashi Group last year announced plans to build an open-air regional shopping center on 20 acres along Kalaeloa Boulevard at the same intersection with Home Depot, The Advertiser and the potential Costco site.

The project, called Kapolei Commons, is expected to be developed on a scale similar to Kahala Mall, starting with a first phase of 250,000 to 300,000 square feet opening in 2008. No tenants have been announced.

Another local developer, MW Group, is considering building a roughly 150,000-square-foot retail center on 10 acres next to a planned self-storage facility.

MW recently bought a 12-acre site between Home Depot and Kmart, and expects to start construction on a 110,000-square-foot self storage facility on two acres later this year.

"We'd like to do retail," said Steve Metter, a principal at MW. "We got a long way to go."

The world's largest retailer, Wal-Mart, is another potential addition to Kapolei as part of a development plan for a 25-acre Campbell Estate site at Fort Barrett and Farrington.

Another potential future project is a shopping center on the scale of Ala Moana Center envisioned by the state Department of Hawaiian Home Lands.

The agency recently made 67 acres it owns in Kapolei available for lease to a developer interested in building such a center, and said in marketing materials that projected growth in population and consumer spending could support more than 1.5 million square feet of additional retail space in the area by 2020.

Kapolei is expected to add nearly 50,000 homes by 2025, doubling the area's population, the agency said.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.

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