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The Honolulu Advertiser
Posted on: Saturday, April 15, 2006

Waikiki tenants given notice

By Andrew Gomes
Advertiser Staff Writer

Hawaiian Peddler Inc. owner Steven Havunen is "freaking out" since receiving his 90-day lease-termination notice from the Food Pantry building in Waikiki. Havunen says "June is the money-est of money months" for his motorcycle-, moped- and bicycle-rental business.

GREGORY YAMAMOTO | The Honolulu Advertiser

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Local retailer Food Pantry Ltd. plans to shutter a pair of three-story commercial buildings on Kuhio Avenue in Waikiki because of concerns over the safety of the aging structures, displacing a half-dozen businesses and clearing the way for possible future redevelopment.

The prime parcel across from the intersection of Kuhio and Kai'olu Street between a planned high-rise and a city parking lot has long been considered a potential site for a new Food Pantry grocery store.

But the retailer said maintenance issues exacerbated by the deluge of rain last month caused it to clear out tenants even though redevelopment plans remain uncertain.

"It's become potentially unsafe," said Food Pantry real estate manager Sandra Moriki-Shiu. "To put money into (the buildings) is not economical."

The decision surprised some building tenants, who were given 90 days notice that their tenancy would be terminated effective June 24.

"I thought we had about five more years here," said Hawaiian Peddler Inc. owner Steve Havunen, who rents motorcycles, mopeds, bicycles and Jeeps to tourists. "Right now I'm freaking out. I don't know if I can find (another) place."

Havunen, who said he bought four new Harley-Davidsons late last year and has significant debt, was frustrated by the timing of his impending displacement. "They didn't even give us the summer, which is our money season," he said. "June is the money-est of money months."

Simon Elbling, co-owner of the House of Flys Hawaii, also said the timing couldn't be worse. "Fifty days of rain, the sewage spill it has not been good for business," he said. "Right before we're about to have a busy season ... it's going to be tough. The timing is horrible."

Elbling said Food Pantry has been a good landlord for the nine years House of Flys has been a tenant.

Still, he said it'll be a challenge to find a new home in Waikiki for his business, which is a "retail/entertainment lounge" that primarily sells Black Flys sunglasses, but also hosts special events like music performances and skateboarding exhibitions.

"It's pretty tough right now," Elbling said. "Real estate took a huge leap last year, and the rents are skyrocketing."

Elbling figures that House of Flys will probably have to downsize or partner with another company to do something bigger. "Maybe it's a blessing in disguise," he said. "We're hoping that our nine-year dream hasn't come to a halt."

Food Pantry, a division of Foodland Super Market Ltd., has owned the property for about as long, acquiring the nearly one-acre site in 1997 from the Magoon Estate for $13 million.

At the time, Food Pantry said it was considering developing a grocery store, but that it had no immediate plans to do so.

Observers saw the purchase as a strategy to ensure Food Pantry maintained at least one large grocery store in Waikiki, because its main store toward the diamondhead end of Kuhio is on land leased from The Queen Emma Foundation.

Still, Food Pantry said in 1997 that a second large grocery store would expand its presence in the densely populated tourist area.

In recent years, new development has drawn more tourists and residents to the 'ewa end of Kuhio, with the luxury retail complex 2100 Kalakaua opening in 2002 makai of Food Pantry's property. Also near the Food Pantry parcel, the Lanikea residential high-rise opened last year, and developers plan to build a tourist wedding chapel and a high-rise condo or time-share.

But the Food Pantry site has remained in a state of decay, with two upper floors empty and a handful of ground-floor tenants, which also include a Planet Surf Hawaii store that moved in about six months ago, a video store, men's swimshorts retailer and antique shop.

Jeff Apaka, who grew up in the "Old Waikiki Market" neighborhood and still lives across the street from the Food Pantry parcel, said he would welcome a new grocery store but will have mixed feelings about seeing the old buildings eventually go.

Apaka said the three-story buildings originally built as apartments are some of the oldest Art Deco buildings left in the area. "It was so beautiful ... big open lanais ... not the way it looks today," he said. "I'd rather see it go than have some bad memories about the way it looks today compared with yesteryear."

Moriki-Shiu said Food Pantry is evaluating the cost of demolishing the buildings, but has yet to make a decision on doing that work or rebuilding.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.