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The Honolulu Advertiser

Posted at 4:23 p.m., Wednesday, June 6, 2007

Business center being planned for West Maui

By HARRY EAGAR, Maui News

LAHAINA, Maui — Kent McNaughton, an Orange County, Calif., developer and 20-year Ka'anapali condo owner, picked up a lot at Lahaina Business Park with the notion of building a small warehouse.

After assembling a local team to begin detailing the project, the chance arose to buy seven similar lots from the estate of restaurateur Jerome Metcalfe, who had planned a restaurant, miniature golf course and recreation complex.

Since he already had done the basic planning, MacNaughton said, he felt he could capitalize on that work by doing eight lots instead of one.

The result is the Keawe Business Center, which McNaughton says will provide West Maui businesses something they haven't had: class-A condo-office or retail-showroom space.

He expects to break ground for the first phase of his project in August and deliver the 10 Ulupono Showrooms within seven or eight months. Two have already been contracted for, by word-of-mouth.

Another 18 office units will take about a year. Three have already been taken, according to Mario Cardone, principal broker at CardOne Realty, the exclusive subagent.

The showrooms will range from 800 to 3,200 square feet, with prices starting around $358,000.

The office suites will be from 847 to almost 1,500 square feet, with prices set from $475,000.

McNaughton expects these to be competitive with existing commercial space in West Maui, for which lease rates run $4 per square foot per month, plus management fees.

For comparison, D.H. Horton Schuler Homes is asking nearly $550,000 for the smallest (1,200 square feet) of the 114 residential condos at its Ohukea project just makai of McNaughton's property. Many of the Ohukea units will have good ocean views over Lahaina Cannery Mall.

Besides offering retail-showroom space, almost unknown in West Maui, and some of the first office space in more than a decade, McNaughton is offering one other inducement.

Each condominium unit will come (at extra cost) with permitted plans for "T.I." — tenant improvements. McNaughton came up with this when he learned that property owners have to wait six months to get county approval for T.I. That might be optimistic. Some developers claim it takes nine months to get a permit to move a nonload-bearing wall in an existing commercial space.

McNaughton is not the only developer of new office and retail space in the area. His lots (except the original) are at the makai side of Lahaina Business Park.

Keawe Street, the access road to the business park, is being extended to link to the first part of the Lahaina bypass.

Downslope and across the Honoapi'ilani Highway, Lahaina Cannery Mall has announced plans for two buildings of similar size to McNaughton's offices.

Lahaina Gateway Shopping Center, a "lifestyle center," is under construction just above the Honoapi'ilani Highway at Keawe Street. Also in the works are several fast-food restaurants and a second Horton residential condominium.

These projects are the first significant increase in retail-office-commercial space in West Maui since Kahana Gateway. As a result, the local (as opposed to tourist) shopping district seems destined to migrate north from the Lahaina Historic District.

McNaughton thinks so.

"It will be the busiest intersection in West Maui," he said.

He said he picked a local development team to make it Maui-style: project manager Mike Wright of Wright & Associates, architect Steve Heller of Steven Heller & Associates and general contractor Bob Poulson of Arita-Poulson General Contractors. McNaughton is also developing a similar project in Lihue.

Keawe Business Center Offices will be within a three-story building of about 23,000 square feet.

Kupuohi Showrooms will offer "real showroom space," with room for offices, warehousing and assembly combined on the original lot, which is a couple hundred yards mauka of the ex-Metcalfe property.

A second phase will put more showrooms on three of the ex-Metcalfe lots.

The last phase of the 3.7-acre development is planned to be a retail shopping center on the two lots closest to Keawe Street. The retail center may include some leased condo spaces, but most of the project will be sold.

McNaughton credits Brian Kakahara of First Hawaiian Bank for inspiring his project.

"He told me there was no office-condo or showroom-condo or retail for the local business community in all of West Maui."

Kakahara in turns credits Cardone with suggesting "flex space" rather than the simple warehouses of Emerald Plaza, one of the initial ventures coming up within Lahaina Business Park.

Kakahara says he expects several other, smaller projects probably will break ground in the commercial complex later this year.

Lahaina Business Park is the first light industrial development in Lahaina "since at least the mid-'70s," he said.

"Certainly there is pent-up demand."

For more Maui news, visit The Maui News.