Hunt's Big Decade

Solar Supporter Meet Hawaii Solar Energy Association’s new director EXECUTIVE INSIGHT, 23

HUNT’S BIG DECADE Over the next 10 years, the developer’s plans will transform nearly 2,000 acres on three islands.

BY JANIS L. MAGIN, PAGES 10-13

SMALL BUSINESS TOURISM RETAIL ENERGY HNL’s new Legislation Rooftop concourse could hurt solar is the ARCHITECT plan industries leader Gov. Ige announced Experts say two The amount of MAKES HIS that Daniel K. Inouye new bills going electricity in Hawaii International Airport through the state generated from solar OWN PLANS will get a major Senate will create panels has increased makeover. Here’s a an “administrative dramatically over the 18 breakdown of the nightmare” for stores past 10 years, a new cost and timeline. and restaurants. study shows. KATIE MURAR, 6 ANNA HRUSHKA, 8 HJ MAI, 9

Commercial Property Management 16 PACIFIC BUSINESS NEWS FEBRUARY 16, 2018

COVER STORY 3 islands. 1,800 acres. 7,000 homes.

Hunt Cos.’ big plans to transform fields of red dirt and weeds in Kalaeloa into a community with homes and schools is about to take off — and so are other projects, from Mayor Wright Homes in Honolulu to Palamanui on the Big Island.

BY JANIS L. MAGIN | [email protected]

The back of the Costco warehouse in Kapo- And now Hunt Cos., led by Hawaii Presi- on completing zoning and entitlements lei is within sight of a grassy, vacant parcel dent Steve Colon, is getting ready to launch for its 1,116-home Palamanui project on of land where Kapolei’s Main Street dead plans that would redevelop several parcels 725 acres above Kona’s airport on the Big ends, but it seems a world away from the of that mostly vacant land adjacent to the Island, selling several dozen single-fami- new shopping centers and homes that have growing city of Kapolei into a mixed-use ly and condominium lots within Mauna sprung up over the past 25 years in Oahu’s community, starting with about 1,000 new Lani Resort, finishing work on the Kilauea Second City. homes, the first of which could be deliv- Lighthouse Village shopping center on Eight years after the Navy transferred ered less than three years from now. Future Kauai, and getting ready to break ground control of more than 500 acres of the shut- phases of development will stretch as far on a four-mile historic trail around Ford tered Barbers Point Naval Air Station under east in Kapolei to makai of the Ka Makana Island. a master lease, the Texas developer has Alii regional shopping mall, which broke The developer is also preparing to start finally gained title to the parcel in Kalaeloa ground just last week on a second, grocery- the design phase on what may be its biggest behind Costco and nearly 200 more acres anchored phase. challenge in Hawaii after Kalaeloa — the of vacant and underused land. At the same time, Hunt is also working redevelopment of the Mayor Wright Homes

This article appeared in Pacific Business News on February 16, 2018 on pages 10-13. It has been reprinted by Pacific Business News and further reproduction by any other party is strictly prohibited. Copyright ©2018 Pacific Business News Honolulu, 737 Bishop Street, Suite 1590, Honolulu HI 96813 PACIFIC BUSINESS NEWS FEBRUARY 16, 2018

This is going to be an urban and suburban environment...we’re working backwards from what Kapolei did...Kapolei built the homes first and now they’re trying to create jobs...Kalaeloa already is an Thomas Lee, senior vice president of employment center.” development with Hunt Cos., walks THOMAS LEE, Hunt Cos. through a parcel along Franklin D. Roosevelt Avenue next to the public housing project into a 2,500-unit Kapolei Costco. mixed-income, mixed-use project on the edge of Downtown Honolulu. trol of the Navy’s 538 acres under a master Hunt also received tentative subdivision lease in 2009. approval for some of its Kalaeloa land and YEARS IN THE MAKING But several actions over the past year by the middle of next year — pending final It’s been almost five years since Hunt offi- have finally put the gears in motion for subdivision approval and approval from cials told the Hawaii Community Develop- Hunt’s development plans. the HCDA board — intends to be able to ment Authority, which was given oversight A year ago, Hunt purchased a little more sell the parcels near Costco to homebuild- of Kalaeloa in 2002, about plans to build than 16 acres from the James Campbell Co. ers for the development of the first 1,000 4,000 homes, along with retail and other — a thin strip of land between Renton Road homes. commercial space at the former Navy base. and Franklin D. Roosevelt Avenue that sep- “This year, things are going to change,” The Navy had closed Barbers Point arates Kapolei from Kalaeloa, from Cost- said Thomas Lee, a senior vice president Naval Air Station in 1999 and divvied up co to where Fort Barrette Road turns into of development at Hunt’s Hawaii office. the 3,700-acre property on the west end Enterprise Street‚ land that the developer “The property is going to start to look a lot of Oahu among a variety of public agen- plans to use for utilities. better.” cies, including the Coast Guard, the state In late October, the Navy conveyed to While Hunt plans to seek another devel- Department of Transportation, the Army Hunt title of 122 acres in Kalaeloa, includ- oper or home builder to execute the plan National Guard and the Department of ing a large vacant parcel near Costco and for its residential lots, the developer will Hawaiian Home Lands, while keeping con- the Hawaii Judiciary’s family courthouse. likely retain a role as the master develop- trol of more than 500 acres on the mauka In late December, Hunt acquired the title to er for Kalaeloa, and form an association to side of the base, closest to Kapolei. Hunt another 70 acres, including another parcel maintain the area, Lee said. entered the Hawaii market a few years lat- slated for residential development. Eventu- “We’re creating a master-planned com- er as the builder of military homes under ally the Navy will convey title for the rest munity, [but] it may not be like Hoopili or privatization contracts with developers of the land Hunt controls under the mas- Ocean Pointe, where you have just one big Fluor and Forest City and formed Hunt ter lease. contiguous piece of land,” Lee said. “Our Development Group in 2006. Last year, Hunt also recently closed on the pur- intent is to put in a master-planned com- Hunt became the owner of those 6,800 chase of the Navy’s water and sewer sys- munity where Hunt is the master develop- Navy and Marine Corps. houses it helped tem, and the HCDA began construction er and we put in the roads and the infra- build when Forest City exited the Hawaii on the Kalaeloa Energy Corridor — new structure and then sell fee-simple parcels market. underground ductlines for Hawaiian Elec- to homebuilders.” A lack of infrastructure — specifical- tric Co., Hawaiian Telcom and Spectrum Before the first shovel hits the ground, ly electricity and water — and issues with cable utilities that extend from Kapolei however, Hunt must present a final plan gaining title to the land put development at Parkway down Enterprise Street to the to the HCDA, which, at this point, may be Kalaeloa on hold after Hunt took over con- National Guard facility. this summer, Lee said.

The HCDA is then required by law to hold a contested-case hearing before the BUILDING A COMMUNITY board of directors can consider the plan for The numbered parcels are where Hunt envisions the first 1,000 homes, approval, said Garret Kamemoto, the agen- starting at No. 1, will be built. Hunt recently acquired the title to the cy’s interim executive director. Once the plan is deemed complete, HCDA has 120 parcels, known as parcels 1, 2, and 3. days to complete that process or the plan is automatically approved, he said.

THE ROAD AHEAD Not all of the land in Kalaeloa is vacant. Ka Makana Alii Hunt currently has some 50 tenants on 350,000 square feet under roof, including K-1 Speed, Barbers Point Bowling Cen- Kapolei ter, Tamura’s Market, American Machin- DR Horton High Costco ery, Kamaaina Kids, Coral Crater Adven- School ture Park and Hawaii State Federal Credit Union, which recently opened a call center 1 at the Kalaeloa Professional Center at the 2 corner of Saratoga Avenue and Lexington 3 Saratoga Ave. Street. Hunt sold two parcels with 520 units of former Navy homes several years ago to Carmel Partners, which sold them to an affiliate of Rockpoint Group in 2015 for $154.5 million. The developer kept the Navy’s former bachelor officer quar- ters, and redeveloped the buildings into m aps4news.com/©HER E 100 affordable one-bedroom apartments, now called the Wakea Garden Apartments. ing in 2011, a 10-acre parcel at the corner multifamily homes. Another 110 acres of land is leased to of Roosevelt Avenue and Enterprise Street “This is going to be an urban and sub- businesses for vehicle storage and oth- where construction of the utility lines is urban environment,” Lee said, pointing er uses. Lee noted that commercial real currently happening. HCDA’s target date down the rural street lined with trees, estate firms CBRE and Colliers Inter- for completion is August, after which brush and utility poles. national Hawaii hadn’t counted Hunt’s HECO will install its lines. The utility lines and poles will be under- industrial properties in their research pre- Further west, Hunt will need to extend grounded, and, sometime in the future, an viously because the land was leased from a trunk line along Kamokila Boulevard — extension of the Honolulu rail line will go the Navy. Now that Hunt owns some of Lee said the line already runs underneath through the neighborhood as it makes its the land, he expects it will affect the mar- the railroad tracks that separate Kapolei way from the Kalaeloa Airport to the cen- ket’s statistics. However, researchers from from Kalaeloa — in order to run power to ter of Kapolei, he said. both firms say they only count the build- the future residential subdivision behind Hunt expects the homes built in Kalae- ings available for lease, and not unim- Costco. loa will be priced for first-time buyers, and proved land. The state will eventually bifurcate the up to the area’s median price, which was Some of the commercial land is list- parcel, cutting a 10-acre strip through it $659,000 in 2017, according to the Hono- ed for sale with Sofos Realty Corp. — for an extension of Kamokila, adding more lulu Board of Realtors. Hunt closed on the sale of one proper- access to Kalaeloa, and Lee said the area Lee noted that the HCDA’s master plan ty, a 9,000-square-foot building on two directly behind Costco could be used for a for Kalaeloa calls for higher density than acres of land to longtime tenant Henkels small retail center. what’s currenty seen in mostly suburban & McCoy last fall for $2.7 million. A block away, Saratoga Avenue will be Kapolei. It was the first fee-simple sale of land extended to meet it, creating a Main Street “Even single-family is going to be dens- since Hunt sold the land for the FBI build- with neighborhood shopping centers and er than what people are used to,” he said.

Crews work on the HCDA Enterprise Energy Corridor Thomas Lee (left), walks through a parcel adjacent to project on Enterprise Street in front of the FBI’s Barbers Point Elementary School on Boxer Road with Scott Hawaii headquarters. Wilson, manager of Hunt Cos.’ Kalaeloa properties.

“We want to introduce new product.” water for that development, said Mitch Sil- and running before it is conveyed to the Lee said HCDA’s zoning — a form-based ver, senior vice president of development county water system. code that uses physical form, rather than in Hawaii. “We’re also working really hard on a separate uses, as an organizing principle, But first, the Navy system itself needs phasing strategy, that the infrastructure according to the Form-Based Codes Insti- to be upgraded. that has to go in there is phased,” said Steve tute — will allow mixed-use properties that “It’s going to require hundreds of thou- Colon, president of Hunt Cos. in Hawaii. could have multiple uses within one build- sands of dollars of repairs and deferred “That’s not contemplated under the existing, such as a convenience store topped by maintenance upgrades just to bring it in ing zoning, so we’re going to be going back office space or apartments. to the 21st century,” Silver said. to the county in a couple months to get that Some of the existing buildings in Kalae- whole process going.” loa are also historic, he noted, and must be HUNT’S ROARING ‘20s Colon said the master plan for Pala- manui, which is adjacent to the Hawaii restored with the original look intact. Hunt The next decade is going to be a busy one Community College Palamanui campus recently restored a historic storage barn for Hunt Cos. in Hawaii. Here’s a glance of that’s currently being offered for lease. in Kailua-Kona, includes 1,116 residential the developer’s other projects in the works “We’re building a new community, but units, as well as commercial space, retail on three islands. we’re redeveloping an old community and space, park space, a 70-acre business park from a kind of live-work-play perspec- and a hotel. Hunt also contributed $22 mil- tive, we’re working backwards from what KAUAI lion for the UH campus — $10 million in Kapolei (did),” he said. “Kapolei built the Kilauea Lighthouse Village cash and $12 million for its water system, homes first and now they’re trying to cre- Hunt is working on completing the he said. ate the jobs. Kalaeloa already has the FBI, 49,000-square-foot shopping center on Colon said Hunt is hoping to go before the National Guard, the Coast Guard, and Kauai’s North Shore. The center, whose the Hawaii County Planning Commission all these nonprofits and state entities. It anchor tenant is Kilauea Market and Cafe, in March or April — if the project receives already is an employment center.” a grocery concept by Foodland Super Mar- zoning approvals, work on infrastructure The 4,000-home plan likely won’t hap- ket affiliate Kalama Beach Corp., is expect- could start in 2019, with vertical construc- pen right away. While Hunt has secured ed to open in late summer or early fall. tion following a couple of years later. water through the Navy system, it’s not enough. There is enough water for 1,500 BIG ISLAND homes, but there isn’t enough for all Palamanui Ke Kailani 4,000, which means over the next few Hunt is working on getting the water sys- Hunt acquired the the mortgages on years, Hunt will have to find additional tem it built for the 725-acre property up the land at Mauna Lani Resort in foreclo-

We’re building a new community, but we’re redeveloping an old community and from a live-work-play perspective...

THOMAS LEE, HUNT COS. sure from Bank of Hawaii, Central Pacific Bank and Finance Factors Ltd., then spent six years in litigation with former owner Michael Fuchs, former chairman and CEO of HBO. After winning the case, Hunt last year “did a complete property refresh” of the 24 single-family resort lots and several condominium lots. Ten of the lots are currently on the market. “It’s possible that we could ultimately enter into some kind of a joint venture with a condo developer,” Colon said.

Makalei Ranch, makai side Hunt sold a 178-acre parcel of the Big Island ranch last year, and is working on a large-lot subdivision for four or five parcels, the smallest of which is 40 acres.

OAHU Saratoga Avenue in Kalaeloa is seen today (above) and envisioned in this Mayor Wright Homes rendering as a main street with retail and housing in the future. Hunt signed a master development agree- ment with the Hawaii Public Housing the current residents. Hunt is aiming to start work on this Authority last fall for the project that Each phase, or block, will include mul- project by the end of 2019. will redevelop the 364-unit public hous- tiple buildings with a mix of units, Colon Ford Island ing project into a mixed-use community said. Hunt is starting work on a four-mile with 2,500 homes. Hunt is in the process HPHA doesn’t want all of the public trail around Ford Island — where the devel- of completing the environmental impact housing to be segregated into one build- oper built military housing a decade ago — statement process, and will undertake ing, but rather to mix in with the market that will have “30-odd historic nodes” that the national environmental policy act, or and affordable units. will allow joggers and walkers to stop and NEPA, process this year. “They want a good sprinkle of each of see stories and pictures not just about Dec. The project — which will include mar- those income groups in each of the phas- 7, 1941, but also about the island before ket-rate, non-subsidized affordable units es,” he said. “It would require us to demol- World War II. and tax-credit affordable units as well as ish some units, other public housing units University of Hawaii West Oahu the 364 public housing units —will be done would stay online while the first phase is A long-term partnership between Hunt in five phases, Colon said. Hunt is studying being built.” and Stanford Carr Development was cho- how best to proceed, whether the existing The project will also include a grocery sen to develop some 160 acres along Kual- buildings will be demolished at one time, store or drug store as well as other com- akai Parkway, adjacent to the campus, into or in phases, depending on the effects on mercial space. a college town.