The Making Of The New Waikiki
After a 10-year struggle, Outrigger’s new Beach Walk gives Waikiki a new look and feel. Hooray!
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Del.icio.usabout the need for a zoning code change and to mobilize an entire industry to join the effort to revitalize Waikiki.
Back then, 90 percent of Waikiki’s renovation projects did not conform to existing zoning codes and needed variances. Under those circumstances, there would be no way that Outrigger’s ambitions for a master-planned development on Lewers Street could have happened.
“The hard exercise was convincing the planners and powers-that-be that what we were planning was going to improve what was there,” Carey says. “Our idea for Lewers Street was to create open space at the ground level, where people could use it. Waikiki is a pedestrian destination. “
“If you remember Lewers Street before, it was a dark canyon. The buildings were right up next to the edge of the street, so there was no elbow room when you’re walking around, and light wasn’t able to come through from above. So the premise of creating a piazza was to open it up for people to go. Our ceiling is blue skies.”
Masutomi adds, “We really wanted to create a great street here. Most people aren’t aware that Lewers in Waikiki is the only active mauka-makai street that links Kalakaua Avenue to the ocean. We really wanted to celebrate that.”
Certainly the vision was magnificent, even if it took many years and many hours of explanation to convince governmental and community stakeholders. It also took sometimes contentious condemnation procedures with private property owners on the block.
At every point, Outrigger’s executives assured audiences that they had their hearts in the right place, that they intended to be here for many years, and that “we will do things the right way.”
Masutomi says, “Other companies will say that, and then they’ll cut and run.”
Outrigger is a family-owned, local business with deep roots in the community. With a 60-year legacy in Hawaii’s tourist industry, it is a highly visible member of the community. There would be nowhere to hide.
If there was apathy or distraction from Outrigger’s pleas at the time, it was because of the tough time the state was going through. During the decade of the Waikiki Beach Walk process, tourism was flat, real estate was down, there was an Asian financial crisis, the technology market crashed, we had the Gulf War, SARS epidemic, dengue fever outbreak, terrorism attacks and the Iraq war.
“This is the path we had to travel to get here,” Kaneshige says.
“Only a company like Outrigger could have done it,” Masutomi adds. “We are small, we have assets here, and we had some choices during those tough times. We could have sold property at the bottom of the market. We could have limped along with a cruddy product. To have achieved this says a lot about Outrigger’s commitment to Waikiki.”
Carey adds, “If we were a public company, we would have been gone long ago.”
Indeed, the development of Waikiki Beach Walk is a case study for corporate strategy in the face of adversity, short-term risk for long-term gain, and how an isolated project in the middle of the Pacific can attract outside investment and partners to revitalize an economic engine like Waikiki.
The story’s just beginning, of course. But there is impressive data on which to build a premise.
Before development, there were 11 hotels on the eight-acre site with a total of 3,100 rooms, about 10 percent of the inventory in Waikiki. When Waikiki Beach Walk is completed, there will be five hotels and 2,000 fewer rooms but the mix of accommodation types, from timeshare to a luxury boutique hotel, will offer more choices for today’s traveler.
Carey boasts, “We closed 2,000 hotel rooms and did not involuntarily lay off anyone. More than 500 construction workers were employed on the project. There will be triple the number of jobs on this block when it is fully operated, including all retail and restaurants.”
Kaneshige says, “We wanted to revitalize the destination in a way that brings locals back to Waikiki. The hardware has got to be great - buildings, rooms, sidewalks. But the software’s got to be there too. That’s the people, service and the feeling you get when you walk into a place. We wanted to make it as Hawaiian as we could. When people walk through here, they will know that they’re in Hawaii by what they see, feel, hear, taste and smell.
“We think this is going to be the dining capital of the state. We have great restaurants with different kinds of food and price points.”
More than half of the space at Waikiki Beach Walk is occupied by food and beverage outlets, including Roy’s Waikiki, Yard House, Ruth’s Chris Steak House, Holokai Grill, Taormina Sicilian, Giovanni Pastrami, Kaiwa Japanese restaurant, Shore Bird and Ocean House. Soon to be announced is the signing of a trendy Los Angeles restaurant and the first Oahu establishment of a Hawaii regional chef from the Big Island (Merriman’s?). Trump Tower, opening in two years, will have a signature chef restaurant.
The 41 retail tenants at Waikiki Beach Walk are predominantly local merchants, reinforcing Outrigger’s philosophy of presenting a Hawaiian sense of place. There is 93,000 square feet of retail space, nearly filled to capacity. Only space left is 439 square feet for $15,000 a month.
The Hawaiian sense of place is further executed in the architectural and design elements of Waikiki Beach Walk. The theme incorporates the Hawaiian outrigger canoe and Hawaii’s intimate relationship with the ocean. Glass canopies hover gracefully over an outdoor plaza, and supporting beams are reminiscent of the `iako (booms) and ama (float) of the outrigger canoe.
“This is the most complicated construction project to be built in an existing environment,” Carey says. “This rivals Manhattan and San Francisco kinds of projects.
This has never happened in Hawaii.”
Lessons learned? There were many, according to the executive team.
For starters, Carey says, “communicate, communicate, communicate with your neighbors. We had a smashing success helping our neighbors understand what we were doing and why.”
The company also kept the public up to date on construction and other progress at the job site, using web cams and other real-time vehicles of news.
Carey adds, “It really pays to be a good corporate citizen. If it had not been for our credibility in the community, we would not have been taken seriously. That really paid off for us.”
Finally, we asked Carey what company founder Roy Kelley would say about the bold venture that the company took and the result it has today.
“He would have groused like crazy about it, rag on us about spending too much money, then on opening day, he would have every person he knows around to show them what a great thing we’ve done.”
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