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By Pavel Stankov. October 14, 2013 - 9:55 am
The Honolulu Star Advertiser published a front –page article Oct. 9 about HPU’s newest plan for development of Aloha Tower Marketplace. The article, written by Andrew Gomes, considers HPU’s latest proposal a break from an earlier commercial space type oriented model.
On the same day President Bannister responded with a clarifying note on his blog. Today a private opinion published in the Advertiser nevertheless expressed a sentiment that the modification was deliberate and unethical.
The root of the minor controversy is what the article presents as a sudden change of heart. There is an infographic of an “Old plan” and a “Proposed new plan.” The former consists of a first floor dedicated to retail with the HPU School of Business as the sole academic space while the latter is dominated by facilities like classrooms, International Center, Graduate Center, Fitness Center, Library, Café, Ping Pong, and Pool Hall.
The non-HPU spaces in the new plan are popular restaurants Hooters and Gordon Biersch along with a few undisclosed locations and an unnamed tenant on the mauka side where Chai’s Island Bistro used to be.
In July HPU financed the buy-out of the buildings (the land is leased long-term from the state) via tax-exempt bonds, $42 million worth of which were quickly bought by investors. The article paraphrases Vice President and General Counsel Janet Kloenhamer on the university’s intention to preserve the initial plan involving “thriving retail on the first floor [as] essential to support debt financing payments.”
Despite that, the Star Advertiser reports, as of today only one new business is attracted by HPU – the Barnes & Noble Bookstore Kalamalama already announced in the summer.
This rendering provoked a reader’s comment in the Oct. 11 Star Advertiser. “With regards to Hawaii Pacific University changing its proposal,” the opinion goes, “this is typical of companies who receive permission to do something and then ‘modify’ it to suit their purposes.”
The idea seems to be that the school falsely advertised commercial space on the mall level of the marketplace in order to attract more creditors. “I think this was their intent from the beginning,” continues the letter to Star Advertiser’s editor.
The Oct. 9 article also quotes “entertainment industry consultant” Bob Endreson, who had been previously involved with the ATM project along with developer Ed Bushor. It was Bushor whose 20% HPU needed to acquire in order to gain full ownership of the property, as Kalamalama announced in April.
Reportedly, Endreson “said the new plans don’t fulfill the original redevelopment concept and will dramatically reduce revenue the state receives from the marketplace.”
Neither the consultant nor Star Advertiser, however, clarifies what would be the difference in lease payment to the State of Hawaii if the land under ATM were rented for educational as opposed to commercial purposes and whether there would be any such difference at all.
The Advertiser attributes to Endreson a more curious claim about missed financial opportunities because of the school’s decision to seek full ownership: “Endreson said his group with Bushor had more than 600 events planned at Pier 10 that would have generated $50 million a year but that they won’t happen under HPU’s plan.”
Kalamalama made a calculation that a fulfillment of this promise would entail 1.64 events and $136,986 in revenue each day. Each event would then average $83,528 in profit. In addition, because Aloha Tower is not immensely spacious and a typical gathering would not have more than 800 guests, this would require a ticket price of more than $100 for just one of the one and a half events each day. Conversely, if we count the low-end $40 for a ticket, Aloha Tower Marketplace would have to be flooded with 2,088 partiers for an event, or more than 3,000 people every day.
“If there’s a credible and realistic business plan out there for that, I’ll buy it!” – exclaimed President Bannister in his blog response – “Along with the bridge that goes with it.
In contrast, according to HPU’s official version which was posted the same day on the school website, “the university’s plans do not include the previous nightclub and heavy concert use envisioned by those formerly associated with ATM. [T]hey would nevertheless create a safe, healthy, fun and respectful environment that would be good for our community and good for our students.”
Bannister’s main assertion, however, is that HPU is looking into a number of currently active proposals and the “early” version published in the newspaper is “indicative of what we will do in terms of general scope, but by no means definitive in its details.”
From President Bannister’s post it is not clear to which plan specifically he was referring – what Star Advertiser termed “old” or the more colorful, larger, and recent “proposed” design.
The article also addressed the scrapped sports arena concept Kalamalama announced last summer. The initial idea of creating a space for HPU’s athletic events with the capacity to house at least 1,000 spectators was reformed as a more multi-purpose “250-seat lecture hall.” The reason for this was that the proposed space along Pier 10 does not satisfy the NCAA space requirements.
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