Talk Story with David Striph
Senior VP, The Howard Hughes Corp. Interviewed by Gina Gelber Photo by Odeelo Dayondon
With 60 acres, Howard Hughes is the largest private landowner in Kakaako, which presents an enviable economic opportunity as well as a burden to get complex issues right – such as balancing financial success with sustainability and affordable housing. Striph sheds light on how the company is walking this tightrope with its development plans.
What do you see as your challenges?
The challenge is to always make sure that we are delivering what buyers want. So we spend a lot of time looking at what the competition is doing and what the market trends are to make sure we are always on target with what people want. So far we have been successful.
Kakaako is older and needs renovations. Being the largest landowner brings a lot of responsibilities and it is humbling. It gives us the opportunity to change the face of the city for the better. That’s the most exciting part of my job.
Kamehameha Schools is close, with 29 acres, but nobody else has 60 acres, so we really have an obligation to do it right.
Victoria Ward’s legacy is important. We have all kinds of photos and history of her, her family and their home here. We are using those as inspiration. We are building a 4-acre village green in the middle of our development and a lot of the inspiration comes from her home and fishpond.
At completion, Howard Hughes will have 22 condominium towers and 4,000 residential units. How will this massive project change the character of Kakaako?
It is going to make it a much more walkable and liveable community. Right now at Ward, we have 60 acres and probably 3,000 people who work here every day – but nobody lives here. We hope people will be able to live here, work here and play here. Right now we have about 650,000 square feet of retail, going up to about 1.2 million. This is going to be the entertainment, dining and shopping center for local people.
Senior VP of development Nicholas Vanderboom says being a good steward of the land is important for Howard Hughes in Hawaii. How are you living up to this mantra?
By reaching out to the community. We have been doing that since we got here two and a half years ago. We have reached out to cultural descendants, cultural practitioners, politicians, all of our neighbors and stakeholders – basically everybody in the city and county. We talked to them about our plans. We had inherited a master plan from General Growth, but we changed it quite a bit based on that feedback. So we have really listened.
The entire population of Kakaako will grow from 12,000 to 30,000 by 2030. What steps are you taking to ensure this surge does not overwhelm Kakaako’s infrastructure?
Right now, so many people drive here every day, which is a big part of the traffic. We hope people come to live here, so, instead of driving, they will walk to the theater, restaurants or work.
We are also very much about sustainability. We are the largest LEED Platinum neighborhood-development project in the nation.
There is a lot of misinformation. The infrastructure is there. The state has put over $200 million in infrastructure into this neighborhood over the last 10 to 20 years. It is there. There are some things that we are going to have to do, like widen some sewer pipes as we develop and we intend to do that.
Another thing to note is that we are paying millions of dollars in fees, which will be used for this type of stuff. On Waiea (a luxury residential tower under construction) alone – one project – I think we pay $170,000 in property taxes each year now. Those property taxes will probably go to over $2 million. Every year, that money will be going into the city and get used for infrastructure, roads, sewers, traffic, etc.
The properties that are in the works are ultra-luxury, with one bedrooms starting at $600,000. Will you offer cheaper options?
Absolutely. We are going to have units that span all price ranges. We have to provide 20 percent reserved housing. We are going to actually front-load that and build a lot of it ahead of time.
What percentage of buyers will be from outside of Hawaii?
We don’t know. But, to date, I believe the majority has been local – probably over 70 percent. The plan is to build this for local people. Certainly, there are going to be offshore buyers. We are obviously going to have people from Japan and Korea – and that’s great – but this is mostly for local people.
What is the breakdown of people who are buying into your projects as a place to live versus an investment?
You are always going to get investors, but I think the majority of the people are going to want to live here. And we want that. We are going to have over a million square feet of retail out here – we want the streets activated.
What will be the economic impact on Hawaii in spending and jobs for the Howard Hughes developments?
We don’t have numbers for the entire project. For Waiea alone, the total economic impact will be approximately $925 million. Job creation will be in excess of 5,000, which includes direct and indirect hires.
Given the many construction projects in Kakaako, are you concerned there will be an oversupply of units?
As a developer, you always need to be looking out for that, but, if you read what people are saying – like the state’s chief economist – they say we need between 3,500 and 4,000 new units per year on this island. The last three years, I think we have provided 1,600 on average, so we are short by approximately 2,000 units per year. I don’t think there is an issue. On this island, the demand far outweighs the supply.
There are those who say Kakaako will be like an extension of Waikiki, which many locals do not connect with. What are your thoughts?
It is definitely not going to be another Waikiki. This is going to be a residential neighborhood. They will be very different. We have building spacing requirements, height requirements – there is just no way it will be another Waikiki. This is for locals.
This interview has been edited for conciseness and clarity.