Simon Treacy left his native Australia 22 years ago and began leaving his calling cards around the world — the Asia-Pacific basin, in particular.
Most recently he was based in New York with BlackRock Real Estate, wearing the managing director hat among his titles. This was after BlackRock acquired the management buy-out business he co-founded, MGPA, and the real estate funds it managed across Europe and Asia.
“OK, so for about 10 years I traveled 4-1/2 days a week, on average,” said Treacy. He and his Japan-born wife had honeymooned in Hawaii and came on a family vacation in 2016 with their son, 12, and twin son and daughter, 11.
That’s when they decided semi-retirement in the islands sounded nice, until Howard Hughes Corp. talked the 49-year-old executive into taking over as the development company’s president for its Hawaii operation.
And that is a mammoth undertaking, remaking much of the Kakaako waterfront, building highrises and commercial properties, holding a long-term lease on the state-owned Kewalo Basin harbor. And it comes with its own set of challenges: Treacy declined comment about one of them, litigation over construction of its Waiea tower.
Former tenants have vacated the Auahi Street property that will become a central plaza. This urban neighborhood is watching closely as this amenity moves toward its projected January 2019 completion.
And rival companies are watching how the latest element, microunits, are accepted by buyers. A model of the space-saving retractable bed is set up in the corporate offices; living small can be comfortable, Treacy said.
Howard Hughes plans to remain for the long term — as does its president.
“Hawaii is probably one of the greatest Asian fusion restaurants in the world,” he added, smiling at the joke. “It’s this perfect combination. I feel very at home.”
QUESTION: Lots of talk in recent years about real estate and construction being hot. How is the market now?
ANSWER: I think it’s always hard to generalize where we are, when you’re talking about the real estate market. I think what’s distinctive is, and absolutely thrilling and exciting, is that it is so rare to get 60 acres of land, on the waterfront. …
Q: Did Howard Hughes ever have anything close to that?
A: Well we’ve got big master-planned communities in Las Vegas and Houston and Columbus. That’s their business: master-planned communities, so they’ve got a lot of experience in that.
People are coming here increasingly, from the island and tourists from Waikiki. … I think that’s becoming a bit of a narrative here. I mean, people really do enjoy the park and the beach and Kewalo Basin and Ward Village. I think we’re starting to really get enough critical mass, enough magnets that people are starting to come as opposed to always going to Waikiki.
Q: What happens after you finish building your projects? Do you sell them, and are you out of the community at that point?
A: No. We’ve got a long-term commitment. We own all the commercial areas. … If you look at what we’ve done in America, some of them projects, you know, we’ve been there for decades — and will be there for decades. So it’s a very long-term commitment. … And Kewalo, we’ve got 31 years left with an option to extend.
Q: What is Howard Hughes’ current timeline for the buildout of the residential towers projected in its master plan?
A: It is humbling to be part of the team tasked with stewarding this rich 60 acres that serves as a legacy of Victoria Ward and her estate. Our master plan, which runs through 2024, embraces exceptional design, sustainability and community building. Today, we have two towers open, two under construction, two in sales and we will be submitting our next project to HCDA soon.
Q: What is the company’s affordable housing requirement with your projects? What mix of condos and rentals will be planned to fulfill that affordable-housing mandate, going forward?
A: Twenty percent of our homes come under the Hawaii Community Development Authority Reserve Housing Program, which sets affordable prices and requires buyers to be local residents and meet specific income criteria.
Although our requisite is to provide 475 total reserved units, our approved projects exceed this mark by an additional 50 reserve homes. Ke Kilohana will open in 2019, and bring 375 reserve homes and ‘A‘ali‘i will soon offer 150 additional reserve homes for sale, totaling 525 reserve homes to date.
In 2015, we proposed a rental project, which was denied by HCDA, therefore our current plan, is to continue our focus on for-sale homes exclusively.
Q: For your luxury and market condos, what is the commitment to local buyers? And how do you define “local”?
A: ‘A‘ali‘i, our most recent project, provides the best example of our commitment to local residents. In January, we launched public sales of ‘A‘ali‘i with owner-occupant sales providing individuals intending to live in their homes first access to inventory nearly two months ahead of investors.
Buyers were required to sign an affidavit declaring the home will be their primary residence. This commitment provided kamaaina priority, as well as those wishing to return home to the islands. The response from local buyers was immediately enthusiastic — with individuals lining up overnight outside our sales center to be first in line to purchase.
Q: Does Howard Hughes plan any partnerships with the Honolulu Authority for Rapid Transportation in any of the rail elements in the community? Any other public-private partnerships?
A: We do not have any partnerships with HART for the rail at this time although we will consider any proposals made by HART. We have a successful partnership with HCDA to rejuvenate approximately 30 acres of waterfront at Kewalo Harbor where we have commenced a $20 million renovation of the harbor that will revitalize and upgrade the facility.
Q: Is there any plan for addressing the homelessness problem in the community?
A: We have taken steps to address homelessness. One example is through HomeAid Hawaii, the nonprofit we started three years ago, which brings developers, contractors and industry professionals together to provide solutions to the homeless population. To date, the project has included work with the Youth Outreach (YO!), Next Step Shelter and Tutu Bert’s House.
Additionally, through the Ward Village Foundation, we have donated over $1 million to local nonprofit organizations and will continue to support the numerous organizations that have the expertise and ability to assist the community in addressing issues facing our community — including homelessness, educational enrichment, sustainability and promoting the arts.
Q: Given your past work developing waterfront properties, how will this community compare?
A: So, I’ve has a very long involvement in the Urban Land Institute, which is a nonprofit globally — 36,000 members. A global trustee and I’ve been chairman of South Asia, and have looked at a lot of markets, a lot of cities where they have real estate and infrastructure challenges where the public and private have come together.
And again if you look at Oahu, particularly Kakaako, it is probably one of the best global opportunities today for public and private to work together for the betterment of the community, and do something really special.
But it will require a public-private approach on infrastructure and real estate, based on how do you work it from the street level up and out. Rather than, you know, more buildings, more kinds of architecture, how do you get the grand plan all working well?
Part of that is, how do you walk all the way from Waikiki, all the way through to Kakaako and beyond? Things like that are very important, because the biggest trend globally in real estate is wellness.
Q: Wellness? Really?
A: Absolutely. It’s becoming a major issue.
Q: Making places walkable?
A: Walkable, accessible, at the right street level for old people, for handicapped, for pets. How do you make it a place where people want to come, and feel really comfortable and can go to different zones and have different experiences?
