Last week, Pacific Business News reported that The Kobayashi Group and The MacNaughton Group had canceled plans to build the Vida at 888 Ala Moana luxury high-rise condominium project, citing slow sales- big news for the Kakaako real estate world. Read more from PBN, below:
“Primarily, it was the fact that we got off to a good start with our pre-sales, but over the past three to four months, there was a real slowdown in the market for Vida,” BJ Kobayashi, co-founder and partner of Kobayashi Group, told PBN. “Construction costs rising was probably one of the other factors.”
Construction costs in Hawaii, which jumped by a staggering 13 percent in 2014 — the highest percentage in the United States and more than double the national average.
The developers have canceled a contract with landowner Kamehameha Schools to purchase the two lots encompassing about six acres in Kakaako.
Kobayashi told PBN that plans to develop the block near Vida are also being shelved.
“We were pursuing the larger of the two projects first, [which was] Vida and [the other project] we were going to pursue after Vida,” he said. “We weren’t working on two sites simultaneously.”
The developers have met with Kamehameha Schools to discuss their decision, and said that the state’s largest private landowner “respects and supports” their decision. PBN reached out to Kamehameha Schools for comment Friday afternoon.
“We informed our buyers today [Friday] that we will discontinue sales for Vida at 888 Ala Moana Boulevard,” the developers said in a joint statement. "Vida was a luxury condominium project which was to be located on Kamehameha Schools land at the corner of Ala Moana Boulevard and Koula Street. Although the initial launch of Vida was a success with over 40 percent of the units sold, sales for this project had slowed in recent months.”
The developers noted that despite strong marketing efforts, community outreach and education about the up-and-coming Kakaako community, the market feedback indicated that it was premature to proceed with the Vida project at this time.
The project also faced competition from two other high-end buildings, Waiea and Anaha, under construction nearby at The Howard Hughes Corp.'s Ward Village. Howard Hughes Corp. has also starting marketing its Ward Gateway Towers project, another luxury building planned for the Ward Warehouse site a few blocks from the Vida site.
“The majority of our buyers are local residents who have been waiting patiently for their homes to be built, and many are returning customers,” the developers said. “At the current sales rate, we could not deliver our buyers’ homes to them in a timely manner. As such, we decided to release them from their contracts immediately and refund their deposits.”
Kamehameha Schools’ master plan proposes seven residential towers with 2,750 units and 300,000 square feet of commercial space on 29 acres on nine city blocks.
Vida at 888 Ala Moana was to have been built on a 3.5-acre site formerly occupied by a Cutter Mazda automobile dealership and service center. Sales prices for the project were about $600 to $2,500 per square foot, which was comparable to the per-square-foot sales prices per square foot at another Kobayashi-MacNaughton project, ONE Ala Moana.
The 38-story Vida tower was to include 265 two- and three-bedroom units and was designed by Los Angeles-based Arquitectonica and Honolulu-based Ben Woo Architects. Planned amenities for the project included guest suites, movie theaters, dining rooms with a chef’s kitchen, children’s play areas, game rooms and a putting green.
“We’re honored to have a great relationship with Kamehameha Schools, [and] we continue to have active discussions about the future of these two sites,” Ian MacNaughton, partner at The MacNaughton Group, told PBN. “We are committed to the vision of Kakaako, as well as Kamehameha Schools.”
Walter Thoemmes, managing director of commercial real estate for Kamehameha Schools, said that it respects and supports the developers’ business decision on this matter.
“They have been strong supporters of the revitalization of Kakaako, and they are valued development partners,” he said in a statement. “We look forward to continuing our long, successful relationship with these firms and their principals.”
The Kobayashi Group and The MacNaughton Group also developed the Hokua and Capitol Place mixed-use projects in Honolulu, and are also working on a project that includes seven ultra-luxury condominium towers planned for what is now a parking area of Ala Moana Center fronting Ala Moana Boulevard called Park Lane Ala Moana and another luxury high-rise in Waikiki at the King’s Village site.