PRINT THIS STORY:

CHANGE TEXT SIZE:

ROYAL TREATMENT

GGP fixing up Queen Ka’ahumanu Center, Hawaii’s third-largest mall

BY GEORGE FURUKAWA

With their renovation of Ala Moana Center, Hawaii’s largest mall, now nearly five years old, General Growth Properties and Seattle-based design firm Callison Architects have turned their rehabilitative attentions to Hawaii’s third-largest mall, Queen Ka’ahumanu Center, in Kahului, on the island of Maui.

The $5 million makeover is an attempt to shore up the mall’s competitive advantage against new big-box competitors on the island. “The town of Kahului is growing,” said Roger B. Lyons, senior vice president of retail services at CB Richard Ellis Hawaii. “The center’s challenge is to stay vital and offer a shopping experience that the current as well as future residents will find attractive.”

To achieve that, the team plans to have the center’s lighting, interior color scheme and rest rooms updated by June, says Lisa Paulson, the center’s marketing manager. New pushcarts for temporary tenants and an ocean-themed children’s play area have already made their debut.

Other improvements include the removal of the center’s grand staircase, the addition of stone cladding on the front columns and the center court interior columns, and the relocation of the customer service center into a newly designed center wrapped around center court escalators.

New tenants include Alexander’s Fish and Chips, Baskin-Robbins and Paul Brown Salon. Sharper Image, T-Mobile and other existing tenants are moving into larger stores within the center. The current anchor tenants are Sears and Macy’s stores. Specialty tenants include American Eagle Outfitters, Borders Express, Kay Jewelers, RadioShack and Wet Seal.

The 572,896-square-foot mall, which takes its name from Hawaii’s first female monarch, was last renovated in 1994, when a third wing and second level were added to accommodate a growing roster of tenants. It was originally built by Dillingham Land Co. in 1972 and was acquired by Maui Land & Pineapple Co. in 1986. Its current owners are an investor consortium of Seligman, Coast Wood Capital and Somera Investment Partners. General Growth has been managing the center for Somera since September 2003.

The center’s outstanding demographics have made it a must for retailers seeking to do business on the island, Paulson says. “The center’s trade area of 124,636 residents is projected to grow by 12.7 percent over the next three years — more than 2.5 times the national average,” she said, adding that the trade area’s annual household income averages $71,001, which is 12 percent above the national average. Further, more than 1,700 new homes averaging $425,000 in price will be built here over the next three years, she says.

The center’s annual sales per square foot average about $445, Paulson says, noting that it is the shopping destination for year-round Maui residents as well as a large number of part-year residents not reflected in the trade-area population. With visitors added, the mall reports more than 8 million visits per year.

About 24,000 tourists per month arrive by cruise ship in the harbor three blocks from the center, Paulson says. The harbor will have a ship in port five days a week beginning in October. About 1,700 people per month use the shuttle between the ship and the center. Visitors make up 15 percent of the center’s customers. They spend about an hour and a half per visit and spend $130 on average.

Several other factors make the center a gem in General Growth’s management portfolio, she says. Shoppers visit the center 77 times per year, for example, nearly twice as often as at the typical General Growth mall. They spend an average of $104 per visit — 85 percent higher than the General Growth average, she says.

Yet, a recent spate of big-box development along nearby Dairy Road threatens to drain shoppers from Queen Ka’ahumanu, local observers say. The competitors are power centers Maui Mall and Maui Market Place, plus a Wal-Mart three miles east of the center, along with the luxury-oriented Shops at Wailea, in Kihei.

General Growth also faces a competitive quandary on Maui, Lyons says, because one landlord, Alexander & Baldwin Properties, owns almost all the commercial property on the island.

“Alexander & Baldwin just rezoned an area behind Maui Mall for industrial and commercial development,” Lyons said. “If development keeps growing away from the center, that’s going to be a challenge for General Growth.”

But the renovation will help keep the competition at bay, at least for now, says Brian C.H. Honda, president of Mix StudioWorks, Los Angeles. “The improvements will keep the center from losing value,” Honda said. “The commercial makeup of the area is fairly diversified, if not sprawled. I don’t expect the area to change significantly in the near future.”

Honda was a principal at The Jerde Partnership, a Venice, Calif.-based urban-design firm, where he designed large-scale mixed-use projects in Asia, as well as the Palms Resort and Casino, in Las Vegas.

General Growth Properties’ challenge for Queen Ka’ahumanu Center is to keep things fresh and interesting, as well as continue to stay competitive in offering an exciting shopping experience to residents and visitors alike. General Growth Properties must also meet the challenge of competing with big-box stores that are changing the dynamics of the area because of their development away from Queen Ka’ahumanu Center.