Developer Christine Camp said her company’s acquisition Friday of Topa Financial Center is just a small part of a larger trend in reimagining “DOHO” — downtown Honolulu — with its many largely vacant office buildings.
“When you have one building, it’s a rehab,” said Camp, president and CEO of the Avalon Group. “When you have several, it’s a reimagining of the whole downtown Honolulu. I’m not the only one.”
The downtown area has seen a decline in the use of commercial office space, particularly after the start of the COVID-19 pandemic in 2020 when businesses began shifting employees to remote work, and many have never fully returned to their offices.
Meanwhile, the Honolulu City Council on Friday unanimously passed Bill 51 to allow residential use in areas zoned for commercial use, which was mandated by Act 37, enacted earlier this year after passage by the state Legislature, requiring each county to adopt or amend its ordinances for adaptive reuse of existing commercial buildings in their respective building codes.
“When you try to adapt buildings designed as office buildings into apartments with living rooms, bedrooms and bathrooms, you run into a lot of code issues and other issues,” said Honolulu Managing Director Mike Formby.
So, “this is a major accomplishment,” said Formby, who will review the bill before it goes to Mayor Rick Blangiardi’s desk for signature.
Avalon’s first downtown acquisition, the Davies Pacific Center, an office building on Bishop Street, was initially intended for conversion mostly into condominium units. The project, dubbed Modea, stirred a lot of interest, and Camp confirmed that many of the proposed market-priced condominium units have sold.
However, she said, Avalon has been waiting for permits and changes to the housing code that require the Legislature and the City Council to make changes to laws that would be “helpful in adaptive reuse,” but it is taking a long time.
“We’re probably not going to be building condos” at the former Davies building, she said. “We’re pivoting away from the original plan. I’m not sure what that will be.”
But she said construction will begin in early 2025. For now the company is still relocating current tenants.
Topa, Avalon’s latest and fourth downtown acquisition, with a hefty nine-figure price tag, has two 20-story high-rise office towers, formerly the Amfac Center, bounded by Bishop Street, Nimitz Highway and Fort Street Mall.
Camp declined to disclose the amount paid for the property.
While the tower on Bishop Street will remain a “class-A office building,” the tower fronting Fort Street Mall will be the focus of “immediate redevelopment,” she said. Currently, the two buildings are connected by a retail promenade, but Camp said their identities will be separate.
She envisions creating the entire ground floor of the Fort Street Mall tower as a “destination retail shopping” place. The building is just 10 minutes from the airport, across from the proposed, yet-to-be-completed rail station and across from the ocean with amazing views, she added.
Camp believes that if people are given a reason to come back to downtown, then people will return to live, shop and visit.
“I envision there will be over $1.8 billion coming into downtown and Chinatown,” she said, with Chinatown getting $500 million of that amount in new projects.
She pointed to other investors who have been working on apartment conversions, such as 1060 Bishop Street LLC with its affordable rental units, hotels such as AC Hotel Honolulu by Marriott, and Santa Monica, Calif.-based Douglas Emmett, which owns and operates multiple class-A office buildings and apartment communities in Southern California and Honolulu, including four major properties here.
Along with shops and entertainment venues, Camp said there is a push to bring in businesses displaced by high-rise developments in the Keeaumoku area, as well as parades and festivals to downtown Honolulu.
“We can reinvest by makings sure parking lots remain open after hours,” she added.
Formby said that even if office buildings are being converted into residential properties, many people may still be reluctant to live in an area that goes dark at night. Unlike some mainland city centers where there is a vibrant nightlife, Honolulu is “largely dead at night,” he said.
He said stakeholders in the downtown community are coming together to create a downtown improvement district that would provide some funding for staffing “to ensure people are safe, streets and sidewalks are clean and to activate the community.”
Formby said the improvement district would function like the Waikiki Improvement District Association, which has “aloha ambassadors” during the day and night to ensure safety for tourists and businesses, among other activities.
Camp said Colbert Matsumoto is leading the effort with 40 business owners willing to join in. They plan to meet Jan. 15 to explain the proposal to business owners in the district.
Avalon has eight projects planned. They include the former Fort Street Mall Walmart for $38.25 million. The property, with 87,000 square feet of store space and 454 parking spaces, will be converted, in part, to 15 indoor pickleball courts, which is being called “Pickles at Forte,” simulated golf, food and beverage, and plenty of parking.
A portion of the Walmart block went to house Hawaii Pacific University’s science hall.
The company also is working with Catholic Charities for senior housing on Fort Street.
“We control 1.1 million square feet of downtown Honolulu and 1,800 parking stalls,” Camp said.
Another downtown project Avalon is planning will be a new residential construction development on Fort Street.
