Public should shape the future of Kailua
On any given day
in Kailua, the streets are busy with tourists, some arriving by bus from
Waikiki. Rented yellow kayaks ply Kailua Bay. Rented bicycles roam Kailua
streets. Retail stores sell Kailua-branded beach towels and honu keychains and
coffee cups.
The transformation
of this Windward Oahu town from a sleepy bedroom community into a full-blown
tourist attraction was neither accidental nor inevitable. Turning Kailua into
what some derisively call "Kaikiki" required the efforts of many people who want
to profit from Kailua's natural beauty — B&B operators (legal and illegal),
kayak vendors, tour companies, souvenir-selling retailers and the Hawaii Tourism
Authority, to name a few.
But perhaps the
most influential players have been the Harold K.L. Castle Foundation and Kaneohe
Ranch Co., which now intend to make their own tidy profit off Kailua by selling
a big piece of it — 38 acres of valuable commercial real estate in the center of
town, upgraded in recent years by Whole Foods, Pier 1 Imports and California
Pizza Kitchen.
That land is part
of a $262 million deal to sell about 600 acres of foundation and ranch real
estate assets; the deal with an unidentified public company has until Dec. 31 to
close.
Kaneohe Ranch
endured much criticism for its role in Kailua's transformation. Nonetheless, its
president and CEO, Mitch D'Olier, made no apologies, saying that surveys and
public meetings showed that Kailuans needed and wanted more retail stores, so
they would not have to drive over the Pali to do their shopping.
There's truth in
that argument; Kailua's retail scene is more vibrant than it has been in years,
and Kaneohe Ranch deserves credit for that. There also remains a mix of large
and small businesses in the portfolio, including locally owned establishments
that don't cater to tourists, such as auto body shops.
With a new,
as-yet-unnamed landowner, however, comes uncertainty about how Kailua's future
will be shaped.
According to the
marketing materials from Kaneohe Ranch's broker, the new owner will enjoy the
potential for substantial future profit through redevelopment. Aside from the
property already redeveloped, the broker says, there is lots of money to be made
through "contractual ground lease market rent resets, land value appreciation,
sales of non-strategic parcels, rental rate increases upon lease rollover and,
as the town center is further enhanced, consolidation of CAM (common area
maintenance) expenses in downtown Kailua, and more."
The materials also
noted that since Kailua boasts a Whole Foods and a soon-to-be-built Target
store, the town "is now on the national retailers' radar screen."
Developers can
have an outsized influence on communities, deciding what businesses will be
allowed on their properties, and often seeking variances and rezoning to
maximize the return on their investment — housing projects in Kakaako and Laie
being two prime examples. Such moves could be particularly tempting in Kailua,
where commercial property is scarce, expensive and capable of generating
enormous long-term profits.
Nonetheless,
decisions about the future of Kailua — or any residential community, for that
matter — ultimately belong to those who live there. For Kailua, those decisions
can be found in city zoning laws and the Koolaupoko Sustainable Communities
Plan. The latest plan, finished in 2000 and up for review, sets certain
standards and restrictions for commercial and industrial development. The new
owner of Kaneohe Ranch's portfolio should be sensitive to those plans, which are
intended to ensure that Kailua remains what it has been for generations — not
another Waikiki, but a place where people live, work and call home.
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