Kamehameha Schools readies land for over 8,000 new homes in Honolulu’s urban core
(Source: Star Advertiser)
Kamehameha Schools has long been Hawaii’s largest private landowner and educator of Native Hawaiian children. Soon, though, the organization could become regarded as a major force in housing development.
The $12 billion charitable trust has plans to produce 8,000 to 10,000 new homes in Honolulu’s urban core over the coming years.
Projects being advanced include affordable rental housing in Waipahu, a new community in Waiawa, student housing in Moiliili and more condominium high-rises in Kakaako.
The biggest planned addition would be 4,000 to 5,000 new homes in the Kapalama Kai area, currently dominated by industrial businesses.
Kamehameha Schools representatives have been sharing tidbits of the plans at real estate development industry gatherings in recent weeks, and describe the effort as partly to generate revenue for the trust’s endowment and partly to help address a tight supply of housing that pushes up the cost of living and causes many residents to leave Hawaii in search of less costly housing on the mainland.
“We have the opportunity and, to me, the obligation for these lands to serve a greater purpose than just making money,” Walter Thoemmes, managing director of commercial real estate for Kamehameha Schools, said at a recent Building Industry Association Hawaii meeting. “And a big part of that is housing.”
The amount of housing Kamehameha Schools is pursuing would make it one of Hawaii’s biggest developers, though the trust expects to partner with homebuilders to produce much of the envisioned housing.
David Arakawa, executive director of the Land Use Research Foundation representing Hawaii developers and landowners including the trust, said the plans by Kamehameha Schools will benefit the community.
“Hawaii has a severe shortage of housing units at all income levels, because development of residential housing in Hawaii is very difficult,” he said. “It will be interesting to see Kamehameha Schools create strategic partnerships and alliances with successful housing developers, industry experts and government agencies to implement their strategy and plans.”
Some of the trust’s housing plans are close to being announced with details and could lead to new homes relatively quickly, while other plans are in formative stages and could take many years to be realized.
The biggest piece of the housing production plan is part of a vision approved last year by the trust’s board of trustees for Kapalama Kai.
Thoemmes said 4,000 to 5,000 new homes are envisioned in this area as part of a new mixed-use community with a lot of affordable workforce housing largely in towers along Kapalama Canal near a city rail station planned next to Honolulu Community College. This community vision also would integrate as much light industrial space as now exists in the area so that businesses aren’t pushed out, he added.
Kapalama Kai is the biggest contiguous swath of urban land owned by the trust: some 105 acres including Kapalama Shopping Center, Dillingham Plaza, Waiakamilo Shopping Center and numerous clusters of industrial buildings. Because the plan includes so many homes, possibly in a dozen or so towers, fulfilling the vision could be a multidecade endeavor.
A more near-term project being advanced by Kamehameha Schools would redevelop 6.5 acres in Moiliili that includes Puck’s Alley and the former Varsity Theatre site near the University of Hawaii at Manoa. The trust issued a request for development proposals for this property early last year.
Thoemmes said three developers have signed letters of intent that could lead to a binding deal for the estimated $450 million project, which is dubbed Moiliili Gateway and would include student housing, retail and a hotel.
Another more near-term project is on Kamehameha Schools land in Waipahu where 200 affordable rental homes and a grocery store are envisioned half a block from a planned rail station.
Thoemmes said the trust is in final stages of planning for this with two developers. Paul Kay, planning and development director for the trust, noted in a February presentation at an International Council of Shopping Centers conference in Waikiki that Kamehameha Schools is working on the Waipahu plan with local planning firm G70 and Urban Initiatives Studio in London, where transit-oriented development is commonplace.
Also part of the housing development push by Kamehameha Schools is a new community in Waiawa between Pearl City and Waipio. About 30 years ago developer Gentry Homes arranged to buy about 3,700 acres of farmland in Waiawa from the trust to develop a 12,000-home community called Waiawa Ridge. But that plan was abandoned.
Thoemmes didn’t say how many homes the trust envisions for Waiawa, but said development is focused on a lower portion of the site. A detailed Waiawa plan, he said, is slated to be presented to the state Land Use Commission in November.
In Kakaako, Kamehameha Schools is getting ready to develop what would be a fifth block under a master plan for 29 acres where the trust developed an initial block into the Salt retail complex in 2014 after converting a former office building also on the site to rental housing in 2012.
The rental housing conversion, Six Eighty Ala Moana, kicked off the more active role in housing development for Kamehameha Schools. After that project the trust sold three nearby parcels that other developers turned into the midrise condo 400 Keawe and a pair of condo towers, The Collection and Keauhou Place. The trust also developed a midrise rental building called Flats at Puunui and partnered to develop another rental midrise, Keauhou Lane.
In all, 1,350 homes were added on the four Kakaako blocks. The next piece, dubbed Block C, which is makai of Mother Waldron Park and occupied by warehouses between Cooke and Coral streets, is part of a second phase of the trust’s Kakaako master plan where another 1,400 homes are permitted on five blocks of mainly warehouses.
Kay suggested that plans for Block C would be announced within a few months.
Thoemmes said Kakaako marked a historic shift for Kamehameha Schools and provided the experience the trust is using to broaden its residential development activity. More than 50 years before Kakaako, the trust provided developers land under passive long-term ground leases that led to much of Hawaii’s housing supply along with industrial and retail properties. The land leases provided the trust with lower but less risky financial returns and then led to big cash infusions when much of the residential ground leases were converted to fee-simple sales in recent decades. Then over the last several years, many commercial property leases have expired and allowed Kamehameha Schools to pursue redevelopment that includes a lot of housing.