Ground broken for new Ho‘okele Shopping Center

A&B cementing its position as Maui retail property owner

Dignitaries break ground for Alexander & Baldwin’s new Ho‘okele Shopping Center Tuesday morning near the intersection of Hana Highway and Hookele Street in Kahului. The 94,000-square-foot center will be anchored by a Safeway store. Construction of the store is expected to be completed in the second quarter of 2019.  The Maui News / MATTHEW THAYER photos

KAHULUI — Alexander & Baldwin Inc. broke ground on its Ho’okele Shopping Center on Tuesday, firming its large foothold in the new bustling commercial area near Kahului Airport.

The new, 94,000-square-foot center at the gateway to A&B’s Maui Business Park will be at the intersection of Hookele Street and Hana Highway. It will soon be home to a 57,400-square-foot Safeway grocery store and fuel station. Construction on the store is expected to be complete by the second quarter of 2019.

“It’s exciting, because what I’m most excited about is we are going to own this for a very long time. It’s an investment in Maui,” said Chris Benjamin, A&B’s president and chief executive officer, after the blessing. “It’s a very visible sign of our ongoing commitment to the island.”

And, late last month, A&B acquired the Pu’unene Shopping Center just down the street. It was part of a $254 million, three-property deal with California-based Terramar Retail Centers. The other acquired retail properties were Laulani on Oahu and Hokulei on Kauai.

A&B eyed Laulani for acquisition years ago, but Terramar wasn’t willing to sell, Benjamin said. But then last year, Terramar entertained an offer for its Hawaii shopping center properties as a package and that’s how Pu’unene was put in the mix.

Alexander & Baldwin President and CEO Chris Benjamin

Despite their close proximity, Ho’okele and Pu’unene could both do well even when competing for leases, Benjamin said.

“I think Maui’s a very strong market. I think there’s a lot of good demand. We have been very pleased with our leasing progress to date,” he said.

Benjamin said A&B will have a lot of exposure in the business park area, but he added that the nearby “Maui Marketplace is still formidable. They got lots of opportunity there.”

On Monday, Barnes & Noble made its move from its Lahaina location to its temporary, 11,000-square-foot location in the Maui Marketplace. The bookstore is subleasing from Petco, which moved to the Pu’unene Shopping Center earlier this year.

Other retailers have left Maui Marketplace for A&B-owned properties. This includes Verizon, which relocated to the Pu’unene center in April 2017, and Lowe’s, which built a new store in Maui Business Park and left Maui Marketplace in January 2017. It, too, left a large void at the shopping center on Dairy Road.

As far as seeking other retailers to fill Ho’okele Shopping Center, Benjamin said it was still too early to disclose the next tenants because no leases have been signed yet.

“We are getting close,” he said.

But, overall, he added: “We are looking for tenants that are going to really help meet the retail needs of the residents of Maui. That’s a wide range of tenants.”

As for Safeway, its Hawaii District manager, George Glukfeld, told the audience at the groundbreaking ceremony that this Ho’okele project is one of the most “highly anticipated projects (for) Safeway in Hawaii.”

“This new Safeway we are breaking ground here today will just expand our offerings and bring new elements of Safeway to the community,” he said.

Planned features include an expanded “butcher block,” along with a fresh-cut fruit section to improve food healthy choices. Safeway also will focus on local and organically grown produce.

It is looking forward to bringing in its fuel station to Maui, Glukfeld added.

Safeway officials plan to close the Kahului Safeway store along Kamehameha Avenue when the new store is built at Ho’okele. The old store was built in 1983. It was Maui’s first Safeway.

Safeway has a long relationship with A&B. Lance Parker, A&B’s chief real estate officer, told the audience that Safeway is the largest tenant among A&B properties in terms of the rent paid and the amount of square feet rented from A&B.

A&B has said the Ho’okele Shopping Center also has space for other retailers and a drive-thru restaurant.

Mayor Alan Arakawa applauded A&B’s work on the project, saying “no project pops up overnight” and that the center is 20 years in the making.

He also had words for Safeway.

“I expect the Safeway to outsell any other Safeway in the United States,” Arakawa said, noting businesses have known to make strides on the Valley Isle.

“You can see where the future of Maui is going to gravitate in this area,” he said, noting that Safeway has picked a “good spot.”

“Make a lot of money and invest it in our community,” he said. “I expect charity work to be prominent in your business strategy,” he said to chuckles in the crowd.

After the site blessing, Benjamin said the recent business moves by A&B’s Properties Division were in motion before the shutdown of the company’s Hawaiian Commercial & Sugar Co. plantation at the end of 2016.

“I think now that we are out of sugar, what we do in real estate is more visible,” he said.

As for the 36,000 acres left vacant from sugar on Maui, Benjamin said A&B continues to work on transitioning to diversified agriculture.

This includes cattle. Last year, A&B entered the ranching business on Maui, forming Kulolio Ranch in Hamakuapoko in a diversified agriculture venture on 4,000 acres of old HC&S lands. The ranch, a wholly owned subsidiary of A&B, is collaborating with Maui Cattle Co., a partnership of six ranches, five on Maui.

A&B is working on finalizing a lease for 12,000 acres to be used for a company to grow energy crops, Benjamin said. There could be a formal announcement sometime this year.

* Melissa Tanji can be reached at mtanji@mauinews.com.

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