Meatballs, Dorms and Line Dancing—What the Hell’s Up With Aloha Tower?
Hawai‘i Pacific University not only survived sudden cardiac arrest—a steep drop in enrollment after 2009, accompanied by layoffs and low morale—but used the trauma as a springboard for a dramatic relocation. The move to Aloha Tower Marketplace and Waterfront and Pioneer plazas is a real cliffhanger. What’s next?
The most diverse student body in the country, Hawai’i Pacific University students have enlivened Fort Street but always lacked a real home. Now they’re getting one at Aloha Tower Marketplace and Waterfront and Pioneer plazas. But the path hasn’t been smooth and the next four months promise to be real cliffhangers as new classrooms and more need to be finished by August. If all goes well, however, the big shift could not only supercharge the school, but power Downtown’s transformation.
“370 beds,” says Marites McKee, as we stand on the second floor makai lānai of the Aloha Tower Marketplace. Dean of Student Life and a Hawai‘i Pacific University vice president, McKee is showing off the dormitory view of a place most of us now know as a sadly underwhelming ghost mall with a reputation for taking down brave local restaurateurs and boutique owners.
“My first job in high school was here,” McKee says, recalling a Ray-Ban boutique, a T-shirt store and Honolulu’s original Patagonia. All are gone.
But that was back then. Those 370 beds in HPU’s dorms, called Waterfront Lofts, aren’t just for freshmen and sophomores. They’re an economic driver for the location’s newest incarnation—and the key to HPU’s pulling through a dramatic threat to its existence.
Here, for as little as $1,000 a month for a quadruple occupancy bedroom on the third floor and up to $1,150 for a second-floor double, students get to wander out onto a spacious, cruise-ship-sized lānai. There, all-weather sectional sofas and comfortable chairs grouped around low tables overlook a seascape painter’s idea of heaven: tugboats, a container ship, passing fishing boats, a Coast Guard cutter. It’s the kind of location that you might expect to be stacked with expensive second-home condos, like Kaka‘ako and Ala Moana.
Suddenly, what McKee is proudly showing off—million-dollar views for freshmen and sophomores—starts making sense, even dollars-and-cents sense.
Because all the Aloha Tower Marketplace ever really lacked was beds. It was even in the original plan. “A festival marketplace has to have a central component like an office building or a hotel to feed your market,” says real estate consultant Stephany Sofos, who’s spent more than 40 years on O‘ahu as an appraiser and broker. “A hotel was proposed by the original developer, Chris Hemmeter, but not by the state. So it failed.”
Hemmeter’s $1.3 billion plan in 1989 was undercut by a far less ambitious bid. Instead of becoming an attraction like New York City’s South Street Seaport and Boston’s Faneuil Hall, Aloha Tower generated bankruptcies by two successive operating entities formed to manage the state-owned property (and who knows how many bankruptcies by the 30-odd tenants, many of them small-business owners, each time). “It’s been a failure since day one,” says Sofos. In 2010, state auditor Marion Higa released a report calling the state’s Aloha Tower Development Corp. “flawed, obsolete and mismanaged,” adding that since 1981 “almost every development has resulted in litigation.” In 30 years the ATDC had “managed to complete only one phase of its original, mixed-use development plan.”
It was in the midst of this latest free fall, in 2012, that Hawai‘i Pacific University’s still-new, already beleaguered (and now former) president, Geoffrey Bannister, became the next guy to bet the house on the property. But first he had to partner with Ed Bushor, a California developer best known for transforming part of the ‘Ilikai into The Modern Honolulu, one of the city’s first hipster-boutique hotels. Bushor had been granted the lease to Aloha Tower Marketplace, for a measly $14 million, to stage big outdoor entertainment spectacles on the piers. Unable to attract financing, at then-Mayor Peter Carlisle’s instigation Bushor welcomed HPU as an 80 percent partner, especially since the state promised to issue tax-free bonds to underwrite redevelopment.
As arranged marriages go, it struck many as odd and unworkable. Bushor’s dream of huge late-night crowds drinking plenty of alcohol to arena-style music and DJ acts didn’t exactly mesh with higher education. The marketplace was also failing again. (Chef Chai’s lovely, lonely restaurant would close at the end of 2012.)
As the partnership frayed, the state told HPU it didn’t want a second party on the $120 million bond issue. Dusting off its contract, HPU in early 2013 invoked a buyout clause and turned Bushor out. It all happened awfully fast. Bushor struck back, hiring Honolulu attorney Michael Green, who, reported the Honolulu Star-Advertiser, “alleged Hawai‘i’s largest private university fraudulently seized control of the retail center.”
After a ritual airing of grievances and protestations of innocence, all parties retired behind closed doors. A deal got done. HPU was going it alone on the waterfront.
Now came the hard part. Like Aloha Tower, HPU wasn’t in the greatest shape at the time and things didn’t get better right away. They got worse.
But Bannister’s vision had beds. And that would make all the difference.
HPU President John Gotanda’s corner office high above Bishop Street doesn’t have a view of Aloha Tower, but when he arrived in July 2016 to take the reins from Bannister, he says, “You could see all the potential was there.” Former dean of the law school at Villanova University, the Roosevelt High product inherited a master plan to centralize the hodgepodge of rented classrooms assembled under the 35-year leadership of Chatt Wright, HPU’s president before Bannister. Adding a piece here, a piece there, the ingenious Wright had taken HPU from an enrollment of under 100 students to 8,000, including those in new graduate programs.
But HPU had no physical identity, or rather a schizophrenic one. Up until 2009, about 7,000 of the students attended classes Downtown or on one of six local military bases. Along with the land under Sea Life Park at Makapu‘u and the adjacent Oceanic Institute, an HPU affiliate, the main property owned by HPU free and clear was the Hawai‘i Loa campus on the Windward Side, which housed 200 students and whose health and science facilities served about 1,000—many of whom faced a Pali commute to get to school. When Bannister arrived in 2011, he came to the conclusion that, like it or not, the face of HPU had become tatty Fort Street, grimy underfoot and patrolled by lost souls.
A campus tour was underway, Bannister told HONOLULU Magazine, when he had his vision. “I would watch the faces of people on the tour. You could see mothers and fathers looking around like, ‘I’m not leaving my kid here.’”
Wright hadn’t been blind to Fort Street’s woes. His dream had always been to expand Hawai‘i Loa into the one and only HPU campus. But infrastructure and construction difficulties were formidable—and students didn’t want to be isolated in a beautiful outpost, even if it came with a view of the Ko‘olau Range. Hawai‘i Loa was better suited as a monastery, which is what it resembled when it opened in 1963 as Christian College of the Pacific.
Leasing Aloha Tower Marketplace in 2012 was a good start, but only a start. It could house students and other functions. But if HPU was truly after a clean reboot, it had to leave 1060 Bishop St. and other classroom buildings. The problem? There was no space for classrooms at the marketplace, and displacing rent-paying enterprises that would help HPU underwrite its own lease and costs was not an option.
Even as Gotanda was interviewing for the job in 2015, he says, “I saw campus consolidation as a unique opportunity. The new master plan called for creating a Downtown urban campus. It would allow students to have greater interdisciplinary and collaboration opportunities, greater access to the Downtown community, the center of government, the legislators”—all a source for internships and even jobs.
The week Gotanda was hired, the school also received a visit from accreditation auditors of the Western Association of Schools and Colleges. The audit results, which were finalized in March 2016, three months before Gotanda started, would be sobering, and add new urgency to the move.
“You put the components of a college right there and it makes a good reason for more activities and fun because there are more young people.” —Stephany Sofos, real estate consultant
When Geoffrey Bannister arrived in 2011 to take over for Chatt Wright, the take-charge Kiwi immediately ran into a buzz saw. The 2008 economic crisis had triggered a 2010 plunge in enrollment, which exposed a funding model that depended largely on tuition instead of a revenue-generating endowment or commercial properties. One reason for the weak alumni contributions, most agreed, was the difficulty of sparking fond memories of one’s halcyon youth on Hotel and Fort streets. Another reason: Incoming students never got to bond with each other in a classic dorm situation.
From 2012 on, even while negotiating for Aloha Tower, Bannister grimly oversaw a Dunkirk-style retreat: 18 of 60 professors reapplying at the end of their five-year contracts in 2014 were let go. Retirement benefit contributions by HPU were cut from 11 to 6 percent. An estimated 40 staff members were let go, as well as numerous part-time faculty members. Tuition was raised from $13,000 per year in 2007 to $20,000 per year in 2014. The disruption was profound.
The WASC audit noted that HPU had seemed caught unaware by a “perfect storm of factors” that could affect enrollment, including the Great Recession, devaluation of the U.S. dollar, the bankruptcy of two airlines serving Hawai‘i, increased competition from for-profit and distance learning competitors, fewer local high school graduates, declines in federal earmark funding (perhaps the effect of U.S. Sen. Daniel K. Inouye’s death) and active duty deployments that eroded the military base classes.
Of particular concern to the accreditation committee was a high 33 percent attrition rate between freshman and sophomore years and a low 40 percent six-year graduation rate. Pointing out that its “traditional mix of part-time, working, visiting online, and international students” was out of line with HPU’s peers, the report urged and the university adopted a shift to first-time and full-time college students.
Perhaps the major takeaway of the entire report came on the same page: “As articulated to the [accreditation] team by the Board chair, if HPU does not succeed in attracting full-time freshmen, the long-term viability of the University will likely be further jeopardized.”
Here, in a sentence, was the rationale for jumping at a chance to lease Aloha Tower Marketplace even in the midst of a fiscal crisis. First-time, full-time freshmen are like ATMs, basically—sources of ready cash. In addition to tuition, you can require that resident students buy a meal plan at your cafeteria downstairs, and give them a starter $50 credit for the eSports Arena just steps away where, McKee notes, “they can socialize while gaming instead of staying up in their rooms on their laptops,” and maybe spend a few more bucks, too.
But resident students aren’t only valued for their material contributions. They bring life—a 24/7 presence. And that is another, even more valuable form of currency.
Life begets life. The benefits of having those 370 beds extend outward, in ripples, from Aloha Tower Marketplace into the community. “Basically, Downtown dies after 6 p.m.,” says Sofos. “It reopens at 7 a.m. and on weekends it’s dead.”
HPU is already changing all that, Sofos believes. “You put the components of a college right there and it makes a good reason for more activities and fun because there are more young people. What’s going to happen in the next 10 years in Downtown is they’re going to take out office space and put in residential. It’s happening at 1132 Alakea St., which is a beautiful building adjacent to Our Lady cathedral; they’re going to convert it into apartments.”
According to Stephen Metter, CEO of MW Ltd. and MW Commercial Realty, “with HPU’s expanding presence in Downtown Honolulu, the university will be a key driver in transforming the area from an office park setting to a vibrant residential, college, business, dining and entertainment community.”
The addition of HPU at Aloha Tower and its two nearby wings—at Waterfront Plaza on Ala Moana Boulevard, and Pioneer Plaza on Fort Street Mall, south of King Street—will spur and take advantage of this shift in use, accelerated by the inexorable domination of online shopping. “We’ve had a 16 percent office space vacancy rate the last five years,” Sofos says. “A huge number of larger tenants are moving out of Downtown, like American Savings Bank; many state of Hawai‘i departments are relocating into their own state properties.”
The holy grail of retail had always been foot trafic. No more. “Now it’s retail-tainment,” says Sofos. “A combination of retail and living, where you live above an upscale mall, like what Ala Moana did with Park Lane,” its ultra-luxe condos. Shopping district hotels like those in Waikīkī have always known this. But while no hotel can guarantee 100 percent occupancy—Waikīkī’s had a 79.7 percent rate in the third quarter of 2018—guess who has 98 percent, with a waiting list? HPU.
“I gave up my office at Aloha Tower for student housing!” laughs Gotanda. “I would readily do it again. They love that location.”
Even with resident students (currently numbering 365, says McKee), retail is central to the success of Aloha Tower Marketplace. The nightly dinner-dance cruise ship Star of Honolulu pulls in a crowd (more than 300,000 customers in 2007), Gordon Biersch has thrived for more than 20 years, and Hooters was joined a couple of years ago by Nashville Waikīkī, magnet for line dancers and country-western fans. And cruise ships, most from Princess or Holland lines, pull in once or twice a month like floating luxury hotels.
But nothing has generated excitement like one newcomer. “Since The Old Spaghetti Factory opened,” Gotanda says, “it’s drawn a tremendous amount of people. And a number of our students actually work there.”
Life generates life. Across from The Old Spaghetti Factory is a college division Barnes & Noble. At the opposite end of the pier, on the water, is a café too elegant to possibly be a student cafeteria, but that’s what it is. Also open to the public, Pier Nine by Sam Choy serves students on one of three meal plans—they’re a captive audience, in other words. But captivity in Sam Choy’s world looks pretty nice. The former Don Ho’s space has a crystal-clear harbor view and, in addition to a hot local Asian-Hawaiian style Sam Special every day, offers a decent pizza, name-your-ingredients sandwiches, a loaded hot buffet, salads and, on Wednesdays, says McKee, “poke bowls by Choy!”
Classrooms, multipurpose rooms, a digital library and more line the breezeway. A new kind of college attraction, the eSports Arena, is a 3,000-square-foot gaming space with 26 cutting-edge Alienware computers and PlayStations, some with virtual reality capacity—a result of partnerships with Dell, Sony and Microsoft. “Man, you put on those VR goggles and you’re transported to another world,” says Gotanda.
A college phenomenon since 2010, eSports has surged in popularity and HPU’s arena is one of the biggest. To answer your question, yes, gaming is a competitive sport; the school offers 10 partial scholarships. A recent tournament hosted by the school saw a combined team from Roosevelt and McKinley high schools edge out HPU’s. Five of the winners earned $3,000 prizes, collectible upon enrollment. If that’s a catch, it’s a smart one.
The two-year-long Aloha Tower Marketplace rebuild and subsequent opening to resident students couldn’t take precedence over the academic reconstruction recommended by the WASC audit.
At a retreat last August, the school’s five deans, the HPU board, and provost and vice president of academic affairs Susanne Woods came up with a new academic plan taking the school through 2027. Overall, HPU aims to educate the whole student, not steer them onto a narrow career path. “You can always train someone for a job, but we educate a person for a lifetime,” Woods says. The plan includes commitments to a Pacific-centric identity and to hiring more full-time teachers—not adjuncts—who are engaged in active research, outreach to high-performing applicants and a promise of an internship for every student.
Also, the report vowed, “our student body will continue to be the most diverse of any private university in the United States.” To provost Woods, this is a strong selling point. “We don’t need a campus abroad program,” she says. At times the school has had students from as many as 65 countries. “We have a large population from Norway, Sweden, Denmark, all of Scandinavia, [and] large numbers from Asian countries and Australia,” says Gotanda. “It really is a good mix.”
Woods also stresses HPU’s place in the Hawai‘i education marketplace. “I find what’s happening here is truly exciting,” says Woods. “It’s important to have a Chaminade, a [Brigham Young University], a public university, but it’s important to have a private secular university. And we’re the largest private university in Hawai‘i.”
Woods came out of retirement to take a one-year appointment after a long career at Brown University and Franklin & Marshall and Wheaton colleges. Born and raised in Hawai‘i and a UH Mānoa graduate, she’s passing the torch to a new provost: Jennifer Walsh, Ph.D., currently dean of Azusa Pacific University. “She’s going to be wonderful,” says Woods, who leaves in June.
Speaking of virtual reality goggles, Gotanda and the HPU team, especially Cody Down, associate vice president and chief information officer, could have used some during the past two years—because they had to envision the last puzzle piece: where the new classrooms were going to come from. “Our plan calls for the entire campus to be south of King Street,” says Down, who’s the overseer of the consolidation—which involves building in lots of capacity for data, computing, science and health labs, and more.
A solution lay in plain sight. For its College of Business and College of Professional Studies, HPU already had leased 22,000 square feet in Pioneer Plaza, two blocks from the Nimitz Highway pedestrian crossing to Aloha Tower. Looking along the same line of latitude, what should pop up but Waterfront Plaza, a site with its own recent troubles keeping tenants. Within 500 Ala Moana Blvd.’s ramparts of unadorned concrete, besides anchors Ruth’s Chris Steak House and the Honolulu Star-Advertiser, is a winding inner courtyard lined with a Straub medical clinic, tables, smaller food outlets including a Tamura’s (which also operates a central open-air bar) and a returned former favorite, Vino Italian Tapas and Wine Bar. There is also a big parking structure. Like Aloha Tower, both Waterfront and Pioneer plazas are private property, which means they can be privately policed—sparing students the daily gauntlet of antisocial behavior around Fort, Bishop and Hotel streets.
It seemed like a no-brainer. But even with HPU’s promised infusion of life into Waterfront Plaza, negotiations dragged on as landlord Pacific Office Properties, which also owns the Davies Pacific Center, ran into financial difficulties of its own—the shrinking of Jay Shidler’s once ambitious publicly traded company, Pacific Office Properties Trust Inc., down to two properties. Without a deal, where would the students go to class? Back to Fort Street?
The lease for 100,000 square feet of space, about 20 percent of Waterfront Plaza, wasn’t signed until late September 2018—and the move had to be complete by August 2019. Kama‘āina architecture firm G70 had tackled the buildout of Aloha Tower and now contributed concept design for Waterfront Plaza along with Canadian architecture firm Perkins+Will, before both turned things over to Ferraro Choi for construction drawings. (Perkins+Will is preparing construction drawings for Waterfront Plaza’s science labs.) Facing a rush job and plenty of permitting and design issues, Gotanda and HPU signed up international project manager and expediter giant Cummins Construction, whose recent jobs include Disney’s Aulani resort, the Hyatt Regency Maui Resort and Spa and, yes, The Modern Honolulu.
Even as you read this, construction is going gangbusters at Waterfront Plaza. The students will show up Aug. 26. That’s pressure. But nothing compared to what HPU faced before.
“Aloha Tower has long been the symbol that welcomed people to Hawai‘i,” says Gotanda. “Now it welcomes students from all over the world. We’re excited to see the plan come to fruition.”
Will HPU Spark a Downtown Revival?
The stars certainly aligned for HPU’s shift to Aloha Tower, Waterfront Plaza and Pioneer Plaza, but will it really help trigger a revival of Downtown? We asked Stephen Metter, CEO of MW Ltd. and MW Commercial Realty, for his thoughts. From his email reply:
“The Honolulu central business district has the potential to become a dynamic lifestyle hub—blending work, study, live and play—over the next decade … It’s likely the Aloha Tower-Downtown-Chinatown triangle will become the place to organically share experiences with a diverse community of tourists, locals and students. We can expect the addition of residential buildings, dorms and hotels, more street level activations like farmers markets, entertainment and many cool restaurants.”