November

WHAT ABOUT KYO-YA?

My compliments to David Choo for his thoughtful article (September 2005) on Japanese investment and divestment in Hawaii's hospitality industry. As both a local boy and a long time investor (as a seller to the Japanese in the 1980's and early '90s) in Hawaii's hotels, I found it a fascinating, historical summary of Japanese investment.

However, in his conclusion, there is a significant material error, regarding Kyo-ya holdings, which states, "there are many success stories. Several Japanese-owned properties, such as ... the Kyo-ya holdings ... weathered Hawaii tourism's precipitous downturn and have become beacons for the industry."

Kyo-ya, has been an excellent corporate citizen in Hawaii's tourism for over 40 years. But early last December its parent company, Kokusai Kogyo KK, successfully sold its $4.8 billion debt, at half the price, to Cerberus Partners, L.P., a New York investment group. Cerberus thus acquired a majority, 65-percent stake, in the parent company of the five Sheraton hotels in Hawaii, four that occupy the finest stretch of Waikiki Beach (and could certainly trade for premium prices in the future), and the Sheraton Maui.

Cerberus, a turnaround company that buys distressed businesses, is known for parachuting in to help by infusing fresh capital. According to press releases, at the time of the 2004 acquistion, "Cerberus' restructuring plan doesn't indicate any change to the status of Hawaii hotels." However, Tokyo has now passed control to New York and Cerberus does restructure companies, selling both its under-performing and non-performing assets.

While no changes have happened thus far, to Kyo-ya's holdings here, it would appear inaccurate, in light of the Cerberus purchase, to list Kyo-ya in 2005, as a "success" story of Japanese-owned companies that "weathered Hawaii tourism's precipitous downturn."

What is accurate is to give a big mahalo to these Japanese investors and their operating companies, which have certainly enriched our islands, our people and our economy.

Andre S. Tatibouet,
Honolulu, Hawaii
Via email

Hawaii Business responds:

The recent sale of a significant portion of Kokusai Kogyo KK, Kyo-Ya's parent company, to a turnaround investment group doesn't diminish the success that Kyo-Ya has enjoyed in Hawaii under Japanese ownership. Rather, it is reflective of the economic tough times Kokusai Kogyo has experienced in Japan.

DISAPPOINTING KAKAAKO CONCEPTS

My name is Jacklord Tomas and I am in my architecture degree year (5th year) here at Woodbury University Burbank. I read your article about the waterfront proposals (September 2005) and am interested because my thesis for graduating deals with the stasis that "Hawaiian architecture" is going through. In my thesis I intend to investigate urban conditions of waterfront territories in Honolulu and have chosen five sites where potential prototype urbanisms could be situated. I frankly am disappointed with the drawings presented in the article. I believe that through innovative and new thinking in architecture - urbanism in Hawaii, it can lead to possibilities for Hawaii to be acknowledged as an important entity in the Pacific for commerce, migration, politics, etc. Hawaii should put away its ornamentation architecture and address the issues and the new cultures (non-ethnic related) that are existing and are in transformation right now. There must be a collaborative and dialogue between community, business and political actors alike to create progressive architecture. ...There is much to talk about and I'm just some local boy studying in the Mainland–experiencing places all over the world, outside of Hawaii–just ready to burst with ideas to contribute to the betterment of the land which I'm proud of.

Jacklord Andrada Tomas
Burbank, California
Via email

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