The Story of Big Mike
Mike Harrah is a daredevil and a developer. Sometimes, he is both at once. Now, he wants to make a lasting mark in Hawaii
Guys like Mike Harrah are only supposed to inhabit paperback novels. But here he is, all 6 feet, 6 inches, 300 burly pounds of him, standing on the 35th floor of the Pacific Center, peering across the street at the emerging form of his 36-story Bishop Street condominium building, The Pinnacle Honolulu.
Harrah, owner of development and real estate firm, Caribou Industries Inc. and its $400 million in assets, is a very successful Mainland developer. His commitment to downtown Santa Ana, the government seat of Orange County, is largely credited with igniting that city’s revitalization. He has created massive amounts of office space there, renovated historic homes, built a theater, art galleries, and even a campus for an arts high school. This year, he broke ground on what will be the largest building in the county, Broadway One.
|Mike Harrah |
Developer/real estate magnate
His Company: Calif.-based Caribou Industries, with assets worth $400 million in four states.
His Signature development: Broadway One in Santa Ana, Calif. Harrah broke ground on this building early this year and at 37 stories, it will be the tallest building in Orange County. Harrah is credited with igniting efforts to revitalize Santa Ana, and Broadway One is the centerpiece redevelopment.
His Hawaii projects: Hotel Coral Reef, Kauai; The Pinnacle Honolulu, under construction.
His off time: He spends it doing things like flying Cobra helicopters, riding his Harley and racing cars. Harrah is also a stunt pilot who has appeared in films such as “The Siege,” and “Con Air”.
His hardest job: Picking pineapples in Maui, 1969.
His nickname: Big Mike
“It took me 15 years to get all the approvals [for Broadway One]. We even had to go through an election; there was a referendum and we prevailed,” Harrah, 56, recounted later. Right now, on a conference table strewn with building plans, he is talking story about flying Cobra attack helicopters and Hollywood films. Because besides being a self-made millionaire and real estate magnate, Harrah has been a stunt pilot for the Screen Actors Guild for the past 20 years. He’s been in films such as “The Siege,” “The Rock,” “Con Air,” and TV shows like “ER.”
What exactly does that mean? Take “The Siege.” For that, Harrah flew a Cobra through a set of New York City streets. “We would fire rockets at where these terrorists were hanging out and then flew through a burning building,” Harrah says.
He also races boats, motorcycles and dragsters.
And he looks like an oversize, high-energy member of ZZ Top.
Miguel Pulido, the mayor of Santa Ana, says Harrah brings his free-spirited nature to his building projects. “His risk-aversion profile is completely different from other developers. If you tell Mike it can’t be done, he will figure out how. If you tell Mike the risk is too high, he will take the risk on himself,” Pulido says. “He has done things that nobody wanted to touch … and he has changed the culture and image of Santa Ana.”
Pulido adds, in addition to the plaques in Harrah’s Santa Ana office for such endeavors as water-ski racing, Harrah at one time could bench-press 500 pounds. “Not too many developers can do that,” says the mayor, laughing.
In The Pinnacle, Harrah again wants to make a big impression. The spacious, high-end, 36-unit complex, when completed, will be the only condominium building in Hawaii, with a doorman and a five-star restaurant to call for room service. “At the end of the day, I want everyone to take a look back and say, ‘That is a Mike Harrah project.’ It is superiorly built, it’s great value, and it is a one-of-a-kind landmark,” says Harrah.
Though, if the entire Mike Harrah story is to be told, The Pinnacle is not by any means his first attempt to build something in Hawaii.
In 1969, Harrah graduated from high school in Whittier, then a blue-collar suburban town in Los Angeles County. And the guy who would later work 14-hour days, seven days a week, set out to be a surf bum.
“Me and a friend I grew up with were pretty avid surfers and we both thought when we grew up, we would be surf bums and surf the world. And there is no better place than Hawaii. Our parents didn’t have a lot of money so we both saved up enough money to get one-way tickets to Maui,” says Harrah.
After school, Harrah had learned to frame houses from his workman father and he and his friend had lined up a job in Lahaina, framing a duplex. But when they arrived, bags in hand, the guy hadn’t started any work. “There was no slab, nothing, and we had $100 between us,” Harrah says. So he got a job picking pineapples, his size dwarfing his coworkers. “They paid 67 cents an hour. It is probably the hardest job in the world. Giant rats. Giant spiders. The humidity. And you are wearing sweatshirts, long sleeves, and things are poking you,” Harrah says.
Six months later, they had enough to fly home, and they did. “We did a little surfing, but very little. It is hard to get by on that kind of money,” Harrah says.
Harrah then attended Long Beach State, on scholarship. He also started a framing company. Over the years, the projects got bigger and he turned whatever profits he made into the next bigger project. In casino parlance, it’s called doubling down. Rough around the edges, Harrah met no one’s image of a big developer. He was more comfortable in jeans than suits, he loved racing boats and flying helicopters, but people remembered his handshake was an unbreakable pact and they remembered his follow-through. Then, when tourism blossomed in the Lake Havasu area in Arizona, he was there to cash in.
By 1980, he was a big-time developer and he took another chance on Hawaii. The Kauai Beach Boy Resort needed foundation and framing work. Harrah worked the job for two months and didn’t get paid. Then the owners offered to sell him the resort. He found a partner and got the financing, but politics clouded the deal. So Harrah finished the job and forgot about Hawaii.
In the next decade, Harrah had enough to worry about at home. The high interest rates that struck many developers in the ’80s hammered Harrah’s holdings. He says he fought back, diversified, but the writing was on the wall.
The surfer-turned-millionaire declared bankruptcy in 1990.
THE ARTS OF HARRAH
Harrah wasn’t down for long. He found a fire-sale deal on some mid-rises in Long Beach that were in bankruptcy and tapped an investor who knew him from Lake Havasu. Harrah says he made several million renovating, leasing and selling the buildings and was quickly back in the game.
That’s around the time Harrah dove head first into Santa Ana revitalization. While both developers and tenants were heading out of the city, Harrah dug in. Harrah bought and renovated building after building. In 2002, the Los Angeles Times reported that Harrah owned or co-owned 50 buildings in Santa Ana, worth more than $212 million. He had built office space, parking lots, art galleries, restaurants and a performing arts center. In total, he owned more than 2 million square feet.
“Harrah, 51, has built a real estate fiefdom in the heart of Santa Ana. In the process, he has given the city a respectability it has not enjoyed since the 1950s,” reported the Times.
Perhaps more telling than any story about Harrah and Santa Ana is that of the Orange County High School for the Arts. Pulido came to him in 2000 because the Los Alamitos City Council had suddenly nixed plans to build a new high school campus. Pulido asked Harrah if he would build a campus in Santa Ana. The problem was Pulido couldn’t guarantee him government funding.
“But if you build them the building, maybe they can raise the money,” Pulido says he told Harrah. “With no guarantees, nothing but a wish and a promise, he did it. He has a big heart.” After meeting the students, Harrah wagered his own assets on the project.
Then, in the middle of the campus construction, Harrah was nearly killed in a helicopter accident. A 100-knot wind shear downed the helicopter he was flying into 100-foot trees in the Sierra Nevada mountains. He finished the campus from his hospital bed.
“My guys tacked the plans on the ceiling and I had a stick with a marker on it,” Harrah says. “One day the doctor comes in and he says ‘What the hell are you doing? You are like a paraplegic. You need to rest.’”
“I didn’t want to lay in bed all day,” he adds.
Harrah finished the campus on time and got his money back.
Pulido says today the Santa Ana-based arts high school is nationally ranked.
|The Pinnacle Honolulu |
Address: 1199 Bishop Street
Size: 36 stories
Units: One to two units per floor, with about 36 total. Units are either 1,550 square feet for a half floor or 3,100 square feet, for a full floor; ceilings are nearly 10 feet high.
Cost: Prices range from $800,000, for a half floor, to more than $3 million, for a full floor. Maintenance fees are not finalized, but are expected to run around $570 for a half floor, and $1,100 for a full floor.
Who’s buying: About 75 percent of the units are sold, one-third of those went to local buyers.
Amenities: Swimming pool, sundecks, an exercise facility, sauna, Jacuzzi, a billiards room, a shuffleboard court, a spa treatment room and two conference rooms.
Quote: Owner Michael Harrah says “At the end of the day, I want everyone to take a look back and say, ‘That is a Mike Harrah project.’ It is superiorly built, it’s great value, and it is a one-of-a-kind landmark.”
THE HUMBLE GIANT
By 2004, Harrah had rebuilt his empire and had enough money for a Gulf Stream jet. Once he bought it, Harrah thought about the places he could now fly himself. Later that year, he was back in Hawaii.
That’s when Realtor Paul Kyno, owner of Sleeping Giant Sotheby, met him on Kauai. “He looked like he had just stepped off a Harley,” says Kyno, and was possibly in the Hell’s Angels. Kyno took him to an $8 million oceanfront home, fully furnished, in Poipu. Harrah took a look around and sat down on the couch and pensively started drumming his fingers on the coffee table.
Kyno says Harrah then explained, “I’m kind of a workaholic.”
Harrah says he was thinking to himself that he would go stir crazy without something to sink his teeth into. “So I asked Paul, ‘Do you have a project? Something on the beach that I could build?’”
A few hours later Harrah was ready to make an offer on the rundown, 21-room Hotel Coral Reef in Kapaa. Within a week, he owned it, for $2.5 million, and proceeded to spend $5.5 million renovating it. Harrah says it now rivals a five-star hotel, and he is in the process of finalizing a deal to make it a Harley Davidson boutique hotel, where every room gets a Harley to ride and the rooms are done up in Harley merchandise.
It was shortly after buying the Hotel Coral Reef that Kyno sent Harrah to see the site of what would become The Pinnacle, on the corner of Bishop and Beretania streets, next to the Hawaiian Telcom building. He loved the parcel and bought it for $4 million. Harrah says there were plans on file for the building, but they ended up reworking them almost entirely.
His plans now calls for a 36-story building that will have one to two units per floor, running from 1,550 to 3,100 square feet, have 9.5 foot ceilings, “a lot of marble” and two to four parking spots. The units cost buyers anywhere from $800,000 to upwards of several million for a full floor with panoramic views. Maintenance fees are not finalized, but are expected to run around $570 for a half floor, and $1,100 for a full floor. The elevator, which is fingerprint activated, will only open at your floor, and of course, there will be a doorman.
Harrah has since bought the adjacent parcel, on the corner of Beretania and Alakea streets, for $3.35 million. There, he plans to build an eight-story parking garage, topped by a 5-star restaurant called Ambrosia. Harrah also owns and operates the original Ambrosia in Santa Ana. The recreation deck of The Pinnacle will connect to the restaurant by a footbridge and residents will be able to dine there, and also order room service.
The condo project is expected to be completed by the end of this year. The parking garage and restaurant could break ground in another year and take less than a year to build. Harrah says he has also been assured that his general contractor, Ledcor-US Pacific Construction, will use union employees for the remainder of the project. Harrah’s site was picketed by the union for a short period, after Ledcor was unable to fill all the labor positions with union employees and went to the Mainland for workers. “That won’t happen again,” Harrah says.
About 75 percent of the units have been sold, about a third of that going to local buyers. Ron Ostrander, of Ostander-Chu advertising and marketing firm, which handles Pinnacle marketing, says he and his wife liked the place so much after getting involved with Harrah, they bought a unit. Recently some downtown lawyers and doctors have as well.
Harrah says the units are a bargain. The pricing was worked out before his project got held up in the building department and materials have tripled in cost since then. “It is costing us about $520 a square foot and we are selling it for about $600 a square foot,” says Harrah.
“I would say if I had partners they would be suing me today,” Harrah says. “They would say ‘Jack up the price!’ But after the last two times being in Hawaii, I am going to leave that number alone.”
“I want to be hat in hand and work with everybody here and at the end of the day, we want to say we are here, we built this, we did everything right and we would like to build more things,” says Harrah, his signature jeans topped this morning with an aloha shirt.
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