Small Footprint, Big Shoes

A famous nameplate brings both opportunities and challenges for the developers of Trump Tower Waikiki

September, 2007

Mike Pepper watched his first episode of The Apprentice in the summer of 2006. Pepper, who represents Beverly Hills, Calif.-based investment firm Irongate, had tuned into that season’s finale, because he had a vested interest in the outcome of the television reality show. The winner of the corporate ladder competition, which was overseen by business and media icon Donald Trump, would have the choice of working on any one of the mogul’s interests across the country, including Pepper’s current project, Trump International Hotel & Tower at Waikiki Beach Walk.

“The Irongate guys told me that anyone who is smart enough to win the contest isn’t going to tell Donald that they want to work thousands of miles away in Hawaii,” says Pepper. “But I watched the show anyway. I wanted to know if I had to make room for another staff member.”

As expected, Pepper didn’t get a new apprentice of his own that evening. The winner ended up taking a job in New York City. But the possibility of acquiring a new employee from a live television show is emblematic of the high-end Waikiki residential development’s sudden entrance into the spotlight.

The $350 million luxury condominium hotel is Trump’s first project in Hawaii and joins The Donald’s collection of high-end resorts and residences across the country and throughout the world, including New York, Chicago, Miami, the Caribbean and Mexico. The 38-story Trump Tower Waikiki will feature 462 fully furnished units—studios and one, two and three bedrooms—ranging in size from 570 square feet to 3,000 square feet and in price from $450,000 to $2.7 million. Needless to say, the finishes throughout the building will be high-end.

Construction began on April 9, 2007, and it is expected to be completed in August 2009. Pepper says it was initially a straight condominium project, but Irongate shifted gears when it saw a softening in that market and a surge in opportunities for hotel condominiums, particularly with the Waikiki site.

“The next step was, how do we get the word out?” says Peppers. “They [Irongate] saw another opportunity with Trump. He brought a lot of credibility to the project in a short amount of time.”

The Trump nameplate is marketing dynamite in certain parts of the world, especially in Asia, and it was handled accordingly. The original project went by the mild moniker of “Saratoga Tower,” and affiliation with Trump was kept secret for months for fear that it would attract gold-plated bids from contractors, subcontractors and other potential vendors. Once all the deals were secured and agreements signed, Trump’s affiliation was announced and the buzz began.

It was loud—and glitzy. The development’s Nov. 9, 2006, sales event at the nearby Halekulani hotel was a multimedia extravaganza, simulcast in Tokyo and featuring an “availability board,” which gave prospective buyers real-time updates on available inventory. Although unit pricing was only released that day, and buyers had just 10 minutes to choose their condos, sales were brisk. Designed to be a two-day affair, the event shut down at the end of the business day with all units sold, for a total of about $700 million—a record for a one-day property sale.

“Everyone was tremendously satisfied,” says Pepper. “We had a good feeling there was a lot of good market buzz and people seemed to feel that if they didn’t get in, they were missing out. But after it was all over, it became a construction project.”

With or without The Donald, Pepper’s high-rise project has plenty of cachet and unique challenges. The Tower, the first large-scale residence to be built in Waikiki in 20 years, is also Hawaii’s first condominium hotel built from the ground up. In addition, it is located at the makai end of the newly developed and upscale Waikiki Beach Walk. The area is attracting a varied collection of upper-end retail shops and restaurants, creating an exciting new neighborhood for Trump Tower’s part-time residents. But the location’s busy streets, close neighbors and lack of open space aren’t conducive to heavy construction.

“We have an old saying in construction that you never pick up a pail unless you know where you will put it down,” says Lance Wilhelm, senior vice president and Hawaii area manager of Kiewit Building Group, the general contractor along with A.C. Kobayashi. “The guys who tend to move things the fewest number of times tend to be the most successful in the construction business. With the Trump Tower this is especially true, since we don’t have any space to put things down.”

While few construction projects (especially those in Hawaii) ever have enough space to store building materials or park idle construction equipment, the slender Waikiki building site is especially challenged in this regard. Materials need to be delivered to the site “just in time,” since there is no room to hold any surplus.

“It’s more difficult to build in an area where people are visitors rather than residents,” says S. Lani Smithson, Kiewit project manager. “The tourists are here for only a week or two, and they don’t want to hear heavy construction every day. So we disconnect the backup alarms on our heavy equipment and uses spotters instead. We’re careful about our dust and don’t track mud into the street. Little things like that.”The area is also working and playing seven days a week, so precise coordination of activities and proactive community relations are essential.

The project’s proximity to the ocean poses an additional challenge: sandy, swampy soil, which necessitated an intricate foundation with piles that reach more than 20-feet deep and extensive pumping to drain the site continually.

After nearly six months of construction, the general contractors and their subs have finished the Tower’s foundation and are nearing completion of the second floor. According to Wilhelm, it’s a crucial stage, because after the second floor, crews will begin work on the “typical floor,” a standardized construction space that will be repeated over and over throughout the building’s remaining 30-plus stories. Once crews hit the typical floor, work speeds up significantly.

That doesn’t mean that things will get any easier. Because Trump Tower Waikiki is a condominium and a hotel, the building is being finished and furnished according to the specifications of both the developer and the hotel’s operator. Wilhelm likens the process to building both a custom motorcycle and a production one at the same time.

“[If you are a] homeowner, you want something very unique, but if you’re a hotel operator, you want everything the same, so it’s easy to maintain,” says Wilhelm. “You don’t want 15 different nightstands and 35 different lamps. You know how many different bulbs you would need? This is not something we had to deal with before.”

One thing that Wilhelm and the other contractors don’t have to worry about is hearing “You’re fired!” from The Donald. According to developer Pepper, while Trump has approval rights to certain aspects of the design, he doesn’t have an ownership stake in the Waikiki Tower and therefore isn’t involved in larger project decisions. Nevertheless, the celebrity businessman still casts a long shadow.

“I don’t know how many times I’ve been asked if I’ve met The Donald,” says Wilhelm. “It’s been fun. We’d be doing the same good job, no matter who was associated with the project. But the fact of the matter is that everyone is aware that this is a Trump project. From management to the guy who pumps the little blue toilets for us to the guy who is going to finish the very last room with a little paint.”


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