The owner of Ala Moana Center is planning an expansion of the Sears wing that will extend the retail footprint of the state’s largest mall out to Piikoi Street and up four levels.

General Growth Properties Inc. is doubling the retail space at the Ewa end of the mall, replacing the 340,000-square-foot site that Sears will vacate in 2014 with nearly 700,000 square feet of new stores and restaurants, according to a General Growth site plan distributed at last month’s Las Vegas International Council of Shopping Centers conference, where mall operators solicit new tenants.

"That’s known as the tired end of the mall," said Jeff Arce, a partner of The MacNaughton Group, a local developer. "When you go up to the (Sears’) parking deck, except during the holidays, it is just a big empty field. It’s an indication that that’s just not where people want to be. Sears as a retailer, with all due respect, hasn’t maintained the same level of excitement as some of the other tenants that have come into the mall. They can really upgrade and create a more dynamic and exciting retail component."

The confidential site plan, obtained by the Star-Advertiser, includes a three-level anchor tenant with an entrance on Piikoi Street and a new fourth-level parking deck near the Hookipa Terrace.

Chicago-based General Growth is investing $500 million to buy back the lease from Sears, one of the original tenants when Ala Moana opened in 1959, and redevelop the site for a more profitable use, according to New York investment banking and equity research firm Sandler O’Neill & Partners LP.

Ala Moana generates about $1 billion in sales per year and is among the highest-grossing malls in the nation.

General Growth’s spokesman in Chicago, David Keating, would not comment on the plan.

The expansion would allow General Growth to unlock the value of the prime real estate at the Ewa end of the complex and substantially increase revenue for the center, which is between the bustling Waikiki tourism district and growing residential community in Kakaako.

Ala Moana Center is also the end point of the state’s proposed 20-mile elevated rail line, scheduled for completion in 2019.

"The redevelopment of the Sears wing of the mall is a great opportunity for retailers, both local and out-of-state, to adopt a presence at one of the premier malls in the United States," said commercial real estate broker Mark Storfer, chief operating officer of Ala Moana tenant Hilo Hattie and president-elect of Retail Merchants of Hawaii. "What this means for Hawaii is more jobs in the retail sector. It’ll create more selection and competitive choices for the consumer. It’s going to add dozens, maybe 100, new stores depending on how they configure it."

Ala Moana currently has nearly 300 stores and restaurants, including the state’s only Neiman Marcus.

General Growth recently arranged a new $1.4 billion mortgage on Ala Moana at more attractive interest and maturity terms, a deal that should save money and allow it to reinvest in the property.

In addition to the Ewa expansion, General Growth is planning major upgrades to the mauka area from Centerstage extending to the parking lot on the street level near Kapiolani Boulevard. The plan includes relocating the center stairwell from the ground floor to the mall level, demolishing the shops behind the stage for open space, relocating the public restrooms to the Ewa side of the stage and rebuilding the storefronts on both sides, according to plans General Growth distributed to potential tenants.

"General Growth has approached us (to lease future renovated space) on the ground level in the vicinity of Centerstage," Storfer said.

Ala Moana also is expanding on the opposite end of the mall. The Howard Hughes Corp., which owns the nearby Ward Centers, plans to develop luxury high-rise condominiums above the Nordstrom department store parking lot with The MacNaughton Group and Kobayashi Group.

The growth of the shopping center will extend General Growth’s dominance of Hawaii’s retail market and significantly upgrade the center, which commands annual rents of $200 per square foot.

The project also creates a significant opportunity for retailers, many of whom wait years for a coveted space in the center, whose stores earn on average about $1,200 per square foot per year, or triple the earnings of the average U.S. mall.

The mall expansion may attract new mainland retailers to Hawaii.

"It’ll be great for Hawaii’s retail business because it’s just another opportunity for Hawaii to get a new tenant that otherwise might not come," Arce said.

Some large-scale retailers that have considered entering the local market include Kohl’s, Bloomingdale’s and H&M, according to local real estate brokers.

Subdividing the Sears space follows a previous strategy by General Growth when its last large anchor, J.C. Penney, left the center in 2003.

The mall owner completely redesigned the three-level J.C. Penney store that occupied 220,000 square feet to make way for at least 30 smaller stores and restaurants.