Oahu’s first Ritz-Carlton tower — a 307-unit condominium hotel on Kuhio Avenue — is set to open in late April. The outlook for a second Ritz-Carlton tower next door is less certain even though construction has already begun.
The developer of the Ritz-Carlton Residences, Waikiki Beach Tower 2 might need a new permit before completing the project because of a glitch in its original building agreement.
This could give an opening to opponents of the second tower, who say it blocks views and increases traffic. The developer could face months of additional public hearings and debate over the benefits of the project if it has to obtain a new permit.
“I hope they get stuck in permit limbo forever,” said Waikiki resident Denise Boisvert-Jorgensen. “The Ritz-Carlton project’s developers insulted the Waikiki community with a massively tall and wide wall known as Tower 1 that is parallel to Kuhio Avenue, but now they are adding more insult to injury” with the second tower.
At issue is whether the developer can use the same permitting process it did on Tower 1 for Tower 2. A key part of that is getting cooperation from its neighbor, which hasn’t happened yet.
Los Angeles developer Pacrep LLC built the first tower under a joint development agreement with New York-based Metropole Realty Advisors, which owns the adjacent Luxury Row, a retail center that includes Tiffany & Co., Coach, Chanel and Gucci. However, Pacrep 2, developing the second tower, could not reach an agreement with Metropole for the 246-unit tower, which just started construction at 2139 Kuhio Ave.
Metropole officials declined to comment for this story.
“We would need the adjacent landowners to participate in the process, and right now we are having some difficulty in getting them to move in the same time frame,” said Lance Wilhelm, managing principal of Irongate, which is the owner of the Ritz-Carlton Waikiki Beach property and has controlling interest in the hotel operations.
Tower 1 has the needed permits to open as scheduled. However, since Pacrep doesn’t have an agreement with the Luxury Row owner for Tower 2, it must pursue another option: a so-called “planned development resort” permit, or PD-R. Getting that permit would require public hearings and a debate over community givebacks.
Size of project stirs controversy
The Ritz-Carlton project has been controversial from its start. Advocates said the towers would gentrify a blighted portion of Kuhio Avenue, improving safety and providing needed hotel rooms and jobs. They touted the benefits of welcoming Oahu’s first Ritz-Carlton with luxury retail tenants, including the isles’ first Dean & DeLuca shop, an upscale grocer. The advocates said the project would add landscaped green space and vibrancy to what had been an underutilized section of Waikiki.
But the project’s staggering size, including the 350-foot height of Tower 1, and the direction of its buildings required unpopular exemptions to Waikiki guidelines that protect views and limit height and density.
George Atta, director of the city Department of Planning and Permitting, said it generally it takes about 165 days for a planned development resort permit to be completed.
Jim Niermann, an R.M. Towill Corp. consultant working on the project, began the process Feb. 9 by informing the Waikiki Neighborhood Board of Pacrep’s decision to pursue a planned development resort permit. Niermann said the project would stick to the design for Tower 2 that was approved by the City Council when it granted Pacrep a permit for both towers under Waikiki Special District rules.
“It’s quite pro forma from our perspective,” said Wilhelm, representing the owners. “The WSD (Waikiki Special District) permit is the overarching permit that allows for the development. It’s all been through Council. We aren’t changing any design elements.”
Still, the public process opens up the project to renewed scrutiny from the Waikiki Neighborhood Board, which previously voted against the second tower. It also allows for new decision-making from the city Department of Planning and Permitting and the City Council. If Ritz-Carlton is unable to obtain the planned development resort permit, it could be denied an occupancy certificate for Tower 2.
The Waikiki board did not take a position when Niermann met with the board earlier this month, but said that it would provide new testimony on the permit application.
“If it were up to me, I’d vote against this thing 10,000 times,” said Louis Erteschik, Waikiki Neighborhood Board vice chairman.
Waikiki Neighborhood Board member Jeff Merz said the developer is now in the unenviable position of needing additional community support for a project that has been somewhat unpopular from the get-go.
“Worst-case scenario (is) the community could raise new issues and delay this project indefinitely. Decision makers could take their approval back or refuse to issue an occupancy certificate,” said Merz, who is an urban planner. “I’m sure the occupancy risk is weighing heavily on the developer. They could build Tower 2. Everything could be ready to go. They could have a ribbon cutting and still be told that no one could live there.”
Merz said the new application could result in project delays when there already are heightened concerns about construction shortages and the ever-increasing price of materials and labor.
However, Wilhelm said the resort permitting process is unlikely to change the project’s two-year delivery schedule.
“We already have a building permit for Tower 2. Construction has started on Tower 2, with the foundation nearing completion,” he said. “Sewer work will begin soon, and we’ll be able to go vertical. We anticipate that any of the steps that we need to take from a regulatory perspective will be concluded well before completion.”
Atta said the building code allows for partial permits, such as foundation and superstructure permits, to be issued before plans and specifications for the whole building or structure have been submitted or approved.
”These requests are common, and developers understand that they proceed at their own risk because the final building permit may or may not be granted,” he said.
Atta said the City Council will have to approve the conceptual plan for the new permit and may require community benefits as a condition of its approval. However, Wilhelm said public benefits already are outlined in the Waikiki Special District permit for Tower 2.
“We can articulate where all of those public benefits already have been incorporated,” Wilhelm said.
Wilhelm didn’t convince all residents at the Waikiki board meeting.
Kathryn Henski was among several who opposed allowing a permit change.
“You (Irongate) strike me as a child who didn’t get the cookie from mommy, so you went to grandma to get the second tower. None of us want it, but it doesn’t seem to matter to you,” Henski said.
Mayor, trade groups support building
Still, the project is not without its supporters, who include Honolulu Mayor Kirk Caldwell. Tyler Dos Santos-Tam, executive director of Hawaii Construction Alliance, said the 15,000 tradesmen and women whom his organization represents were supportive of the 2121 Kuhio Ave. tower and also would like to see a second tower built at 2139 Kuhio Ave.
“The first tower at 2121 Kuhio Ave. has created hundreds of construction jobs for our local union members, and the ongoing construction of the second tower will, too. Since building permits have been issued, our members will continue their work on the utilities, foundations and eventually the vertical component of the tower,” Dos Santos-Tam said.
Waikiki Neighborhood Board member Walter Flood, who sells real estate and lives near the project, said Tower 1 construction has caused surrounding property values to rise.
“People may complain about the loss of views, but their units are worth way more than they were before,” he said.
Community debate on the project is likely to continue along with the permitting process. However, Wilhelm said the discussion won’t affect Tower 1, which has permits and is gearing up to open around the end of April.
Doug Chang, general manager of the Ritz-Carlton Residences, Waikiki Beach, said the company is hiring for its first tower.
“Our leadership team is nearly complete,” Chang said. “We are actively recruiting for hourly hiring for positions in engineering, loss prevention, housekeeping and front desk. … We’ll need 150 ladies and gentlemen to get through the opening. By July and August the spa opening will bring the count up to 175.”
Chang said about 250 Tower 1 owners are expected to put their residences in a hotel rental pool, which will begin booking in the next couple of weeks.
