To be Built Next to Ritz-Carlton Project Currently Under Construction
Dec. 10–The developer of a Ritz-Carlton condominium-hotel in Waikiki is moving ahead with an effort to build a second luxury “condotel” tower next to the Ritz project under construction on Kuhio Avenue.
Los Angeles-based PACREP LLC recently submitted a draft environmental assessment with the state for the estimated $159.5 million tower proposed to have up to 280 units.
PACREP would like to obtain permits by April and finish construction of the 39-story building by June 2015, according to the assessment published by the state Office of Environmental Quality Control on Sunday.
The developer indicated earlier this year in sales documents for units in the Ritz-Carlton Residences Waikiki Beach that it was considering a second tower on an adjacent property. However, PACREP suggested at that time that it was only an option being considered.
Jason Grosfeld, a PACREP principal, said the company is looking forward to building another project along the Kuhio corridor. “We think it’s an area of the city that needs improvement, and we’re really happy to be spearheading it,” he said. “We love developing in Waikiki.”
PACREP said in the assessment that it expects unit sales will generate $174 million, or $650,000 on average per unit based on a current plan for 268 units.
Sales in the first tower were strong, with 85 percent, or 263 of 309 units, reportedly sold after an initial weekend sales event. Unit prices in the first tower range from $650,000 to $15 million.
Condotel units are sold by a developer to individual buyers who decide how they want to use and manage their units. Most buyers opt for an on-site management company selected by the developer to manage their units for a share of hotel room revenue, though some may choose to reside in the unit, or rent it out themselves or with an off-site property management firm.
Grosfeld declined to say whether Ritz will manage the second tower. The environmental assessment said the second tower will share an eight-story podium building beneath the first tower along with resident services, recreational amenities and vehicle access.
Amenities in the first tower include two pools, a spa, a fitness center, an entertainment room, a concierge desk and a Ritz Kids lounge.
Commercial tenants announced for the first tower include a Dean & DeLuca luxury food market, farm-to-table restaurant BLT Market and the first restaurant outside Japan for the Edo-style sushi bar Sushi Sho.
PACREP bought the 1.3-acre site for the first tower for $15.5 million in 2012, according to property records. PACREP bought most of the site for the second tower from Food Pantry Ltd., an affiliate of kamaaina grocery retailer Foodland Super Market Ltd.
A purchase price has not been disclosed, though the city for property tax purposes values the almost 1-acre property at about $10 million. Food Pantry had a long-term plan to build a grocery store on the site but in recent years maintained it as a parking lot with 67 stalls.
PACREP also plans to include an adjacent half-acre parcel owned by an affiliate of ABC Stores as part of the second tower project but has not bought that parcel.
Paul Kosasa, ABC president, said discussions for a sale are ongoing.
Land in the area was once part of the old Magoon Estate that was sold off in pieces in the 1990s and led to the development of the luxury retail complex 2100 Kalakaua, also known as Luxury Row, and the Ritz tower.
PACREP bought its first tower site from another developer, K3 Owners LLC, which floated a plan in 2004 to build a tower with 220 residential or time-share units, or 140 condo-hotel units and 120 residential units.
K3’s plan fizzled amid financial and real estate market troubles that began around the time of the project’s anticipated launch in 2007 or 2008.
When PACREP announced plans for its first tower, it said it would be the first new hotel built in Waikiki since Trump International Hotel Waikiki Beach Walk opened in late 2009.
PACREP, which was involved with developing the Trump tower, said Waikiki needs more hotel rooms to accommodate record tourist arrivals as other hotel owners convert rooms to time shares or redevelop hotel property for other uses, such as the Miramar Hotel, which will become part of the retail redevelopment of International Market Place.
