Polynesian Powerhouse

After decades of waiting, the Church of Jesus Christ of Latter-day Saints has

November, 2004

Things move slowly on the North Shore and that’s exactly how Eric Marler and the Church of Jesus Christ of Latter-day Saints like it. Marler is executive vice president and CFO of Hawaii Reserves Inc., a management company that administers church-owned commercial and residential properties, as well as some utilities and common-area infrastructure in the small Windward Oahu community.

The church owns a little more than 7,000 acres of land in Laie, of which approximately 6,100 was purchased in 1865 for $14,000. The property, which was once a sugar cane plantation and before that two ahupuaa (land divisions), includes Brigham Young University Hawaii and the Polynesian Cultural Center (PCC). In 2004, the church’s Hawaii holdings, including land under the Foodland and Pflueger Acura on Beretania Street, totaled 7,032.8 acres, valued at $ 348.2 million.

“The church is very careful about the development of open land. Church officials are exceedingly concerned that whatever takes place on their property communicates all the right things about their relationship with the community,” says Marler. “For that reason, they move very slowly on development projects. We aren’t a build-and-sell organization. We have a build-and-hold philosophy.”

The church hasn’t done much building in quite a long time. Even though the widely popular PCC has drawn hundreds of thousands of tourists a year to the North Shore, there hasn’t been significant commercial development in Laie since the PCC and the adjoining Laie Inn opened in 1963 and 1964, respectively. All that will be changing soon.

Last July, Hawaii Reserves announced plans to replace the 48-room inn with a hotel complex that may eventually reach a total of 228 rooms. The project, yet to be named, will include three low-rise buildings, a restaurant, a pool, a retail facility, a visitors’ center and a museum. The heavily landscaped hotel will be designed along a Polynesian theme and will resemble the nearby PCC. The new resort will be mid-priced and will feature studio and one- and two-bedroom units, some of which will have kitchenettes.

According to Marler, the development of the hotel is being done in conjunction with a planned expansion and remarketing effort at the PCC, the busiest, paid attraction in the state. Visitors will be offered multiple-day, package tours of the center and surrounding area. The addition of first-rate accommodations as well as outdoor and cultural tours should bring a significant economic boost for the PCC, Laie and the rest of the North Shore. Currently, 90 percent of PCC’s visitors buy their tickets in Waikiki and very few stay overnight.

“We believe that we’ve reached critical mass here on the North Shore,” says Marler. “In the summer, tourists can go swimming and snorkeling at our beaches. During the winter, they can watch world-class surfing competitions. We also have some of the best hiking trails on the island. The North Shore could be the Neighbor Island experience for people who might want to split their time between here and Waikiki.”

Marler says that the state’s recent, consistently high visitor counts and the PCC’s strong-as-always performance convinced church officials that the time was right for a major redevelopment. A little more than a year ago, Hawaii Reserve officials began the planning process, which it hopes to complete in six to eight months. Construction could begin in late 2005 or early 2006. Preliminary costs are estimated at $30 million.

NET PROFITS
It is a little known fact that Laie is the home of the hukilau. Actually, it was the inspiration of the famous song. Jack Owens wrote “The Hukilau Song” (1948) after an afternoon visit to Laie. Since the 1920s, the community had been hosting a fishing and feasting event in which participants hauled in a large net filled with fish. In 1940, Laie’s chapel burned down. Shortly thereafter, community members used their hukilau to raise funds for a new chapel, selling tickets in Honolulu and along Kamehameha Highway. In the late ’50s, when church leaders were contemplating ways to finance the education of Brigham Young University Hawaii’s growing Polynesian student population, community members remembered their successful hukilau fund-raising efforts. On Oct. 12, 1963, president Hugh B. Brown dedicated the Polynesian Culture Center, and thus was born Hawaii’s first and most successful foray into cultural tourism. The rest is visitor-industry history. Last year, the center netted more than 800,000 visitors. -DKC

In addition to beefing up the area’s tourism infrastructure, the hotel will also provide the community with sorely needed banquet facilities. It will also be able to accommodate the steady stream of tourists visiting family who are attending the nearby university. But Marler says that function will never outweigh form in the hotel’s design and mission.

“Aesthetics will always come first,” says Marler. “Parking will be in the back, hidden from the highway, and we’re going to have a heavily landscaped berm that will provide a noise damper for our guests, but also be visually pleasing from the highway.”

This significant commercial development isn’t the only thing on Hawaii Reserves’ plate. In the summer of 2003, the church purchased 663 acres of land from the Campbell Estate. It was the first significant addition to the church’s Laie holdings since its initial purchase of land more than 100 years ago. The parcel, adjacent to the northern end of the property, is zoned as secondary agricultural land. But the relatively flat property is more conducive to development, specifically affordable housing, which is a scarce commodity, even on the spacious North Shore. Marler says that the community’s need for housing is dire, yet his company is in the preliminary stages of amending its sustainable community plan, a lengthy process. However, neither Hawaii Reserves nor the church will be rushing to take advantage of the state’s white-hot real estate market. The community always comes first.

“We don’t have a pressing need to make excessive profits from development, so that we can move on to the next project,” says Marler. “We don’t move on. Whatever we build, we have to live with, so we have a predisposition to keep as much of our land open and undeveloped as possible.”

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