The story behind Kobayashi Group and The MacNaughton Group’s cancellation earlier this year of their Vida at 888 Ala Moana luxury high-rise condominium project started many months before the developers decided to ultimately nix the development.
B.J. Kobayashi, co-founder and partner of Kobayashi Group, who was a panelist at a commercial real estate industry event this week, said that they should’ve listened to his brother, Patrick, partner, president and CEO of the family-owned development firm, who four months before the final decision was made, first thought about stopping the project.
At the end of the day, though, what ultimately caused the two developers to cancel Vida was their rising costs, with Kobayashi noting that bids for their Park Lane Ala Moana project and King’s Village project came in three to four times higher than their Hokua condo project that was built 10 years ago.
Kobayashi also noted that Texas-based developer The Howard Hughes Corp.’s two luxury towers being built nearby may have also contributed the slow sales of Vida.
Despite the cancellation of Vida, Kobayashi pointed out that there are a couple of sites that the two firms are looking at possibly developing, and one of those sites could be a high-rise project. The developers have already built the Hokua condo project in Kakaako and ONE Ala Moana near Ala Moana Center.
The firms are currently in various development phases for two condo projects in Honolulu, including Park Lane Ala Moana, which is under construction at the state’s largest shopping mall, and the 133 Kaiulani condo-hotel project in Waikiki at the former King’s Village site.
Building permits worth a total of nearly $25 million were recently issued for three new homes in the exclusive Kukio subdivision near the Four Seasons Resort Hualalai on Hawaii’s Big Island, according to PBN Business Leads research.
The largest permit, $12 million, was issued for an oceanfront 2-acre parcel in Kukio’s Kaupulehu subdivision owned by KFRZ Kona LLC, whose members include San Francisco-based real estate mogul Ron Zeff, according to Hawaii business registration and county tax records. KFRZ Kona LLC paid $10 million for the property in July 2015 and also purchased a 1-acre lot across the street for $1.5 million in September, according to data from the Hawaii Bureau of Conveyances.
Zeff is the founder and CEO of Carmel Partners, which sold a portfolio of rental properties on Oahu two years ago for $300 million to Douglas Emmett and Rockpoint Group, the largest multifamily sale in Hawaii in 2014.
Kailua-Kona-based Maryl Construction Inc. is the contractor on the KFRZ Kona project, which consists of eight detached structures with a total of 10 bedrooms, 10 full bathrooms, two half baths and a one-bedroom caretaker hale, or house, according to the permit filed with the Hawaii County Planning Department.
The second large permit issued was for $10 million for new house on a 2-acre parcel in Kukio. The parcel is owned by SMP Kukio LLC, whose member is Andrew Cooper, managing partner of New York wealth management firm AJ Wealth. SMP Kukio paid $1.55 million for the land in January 2015, according to tax records.
The third permit was a $2.5 million project in the Maniniowali section of Kukio, a five-bedroom, five-bath single-family residence. The 0.6-acre lot is owned by Lot 11 Kukio LLC, whose member, Gregg Todd, is president of luxury homebuilder GM Construction in Kailua-Kona, which has several Kukio homes in its portfolio.
To see more building permits, along with new business registrations, real estate transactions and court filings, the print edition of Pacific Business News, published every Friday.
The Howard Hughes Corp. is challenging the state agency regulating development in the Honolulu neighborhood of Kakaako regarding conditions the agency set for the approval of its newest mixed-use high-rise residential project within its 60-acre Ward Village master-planned community, public documents show.
The MacNaughton Group and Kobayashi Group would like to revisit developing projects in the Honolulu neighborhood of Kakaako again in the future, an executive from one of the Honolulu firms told PBN.
Earlier this year, the two developers canceled plans to build the Vida at 888 Ala Moana luxury high-rise condominium project and develop a neighboring parcel that would have added a total of 500 residential units to Kakaako.
He also noted that there is stiff competition in Kakaako luxury residential market, where The Howard Hughes Corp. and Alexander & Baldwin Inc. also have projects.
Jeff Arce, a partner with The MacNaughton Group, told PBN that when it came to Vida, there were a half dozen factors that led to the decision to not move forward with the project. That said, he noted that the developers did sell a lot of condo units.
Kobayashi pointed out that there are a couple of sites that the two firms are looking at possibly developing, and one of those sites could be a high-rise project. The developers already have built the Hokua condo project in Kakaako and ONE Ala Moana near Ala Moana Center.
The firms are currently in some sort of development phase for two condo projects in Honolulu, including Park Lane Ala Moana, which is under construction at the state’s largest shopping mall, and the 133 Kaiulani condo-hotel project in Waikiki.
Read more about Honolulu’s growing luxury condo market in Friday’s print edition of PBN.
A Hawaii agency has approved a development agreement with a New York developer to build a low-income Honolulu rental project that will include smaller, efficient units such as micro-units.
The Hawaii Community Development Authority, which regulates development in the Honolulu neighborhood of Kakaako, on Tuesday voted to approve its development agreement with Bronx Pro Group LLC.
The key approval gives the developer momentum as it finalizes financing for its $33-million Nohana Hale project, which includes 105 low-income, energy efficient micro-units in two separate 17-story towers set upon a two-level podium that will house the lobby, living room, community spaces and management offices.
The rental project will be built with a panelized building technology that is new to Hawaii. The building’s components will be delivered to Hawaii from the Mainland and assembled in the state.
Bronx Pro Group has already begun pre-development work on the 10,400-square-foot parcel at 630 Cooke St. between Sunshine Scuba and Baby Emporium that’s currently being used as a surface parking lot.
Ron Steitzer, senior project manager for Honolulu-based Construction Management & Development Inc., a consultant for the developer, told PBN that construction on the project could start in 2017 and be completed in 18 to 24 months.
Nohana Hale will be marketed to renters earning 60 percent area median income or less, with 10 percent of the units set aside for renters earning 30 percent of the area median income or less.
This would equate to a single person making no more than $40,260 or $20,150 annually, respectively. The developer said that, in the future if current zoning is adjusted, additional units and mixes may be added.
In June 2015, the HCDA chose Bronx Pro’s development team of EAH Housing, Sustainable Living Innovations LLC, Construction Management & Development Hawaii LLC and Swinerton Builders to develop the project.
Foodland Super Market Ltd. has signed a lease with General Growth Properties calling for it to pay $24.3 million over an initial 20-year term for what will be its largest store in Hawaii — a 47,395-square-foot Foodland Farms store at Ala Moana Center.
The lease, which is scheduled to expire on June 30, 2036, with extensions for four successive periods of five years each, is for Foodland Farms’ new flagship store that will include The Coffee Bean & Tea Leaf, R. Field Wine Co., a Foodland Pharmacy and an in-store bank.
The old 18,500-square-foot Foodland grocery store on the street level of the mall — one of Ala Moana Center’s original tenants when it first opened in 1959 — closed in 2014 after company executives decided to not renew their lease for the space.
Honolulu general contractor Albert C. Kobayashi Inc. has started construction on the new store, which is located beneath the 185,000-square-foot newly-repositioned Nordstrom department store that recently opened in the mall’s Ewa Wing on Piikoi Street. It is scheduled to open later this year.
The store is part of mall majority owner General Growth Properties Inc.’s $573 million expansion project to redevelop a former Sears department store into an expanded three-level retail area with 650,000-square-feet of new retailers, including a 167,000-square-foot Bloomingdale’s department store.
Honolulu, where the median price of a single-family home rose 5 percent last year, was one of the coolest spots in the U.S. for house flipping in 2016, when compared with other metropolitan areas.