President and CEO of Avalon Development Co.
Aug 28, 2015, 12:00am HST by Duane Shimogawa
Last year, Avalon Development and Chicago-based Walton Street Capital formed a joint venture to buy the 123-acre Kapolei Business Park in West Oahu from a division of the James Campbell Co. LLC, with plans to put the 47 fee-simple industrial lots and another 23-acre lot on the market.
Why should businesses consider moving or expanding to Kapolei?
It has become more and more evident that Honolulu is no longer the center of Oahu’s customer base.
Today, more people live West of Aloha Stadium and that shift will become even more pronounced over the next few years when Kapolei’s population is expected to grow another 64 percent.
Companies that move to Kapolei are making a strategic decision to locate to an area where their businesses will have the greatest prospects for growth, with access to a growing customer base and a growing labor base.
From an industrial real estate perspective, what makes Kapolei a great choice?
Kapolei has the state’s largest industrial center only minutes away from the state’s second busiest harbor and the Honolulu International Airport, with easy access from the H-1 freeway.
And let’s not forget the newly opened Kalaeloa Airport which has been in full operation as an interisland commuter airport.
Other considerations include access to a large labor pool which prefers to work in Kapolei, cheaper land costs than in metropolitan Honolulu offering the opportunity to own rather than lease, newer infrastructure to help support up-start and larger businesses and existing enterprise zone benefits for qualified businesses. Historically speaking, even during the last economic downturn, new businesses were opening in Kapolei while growth in the other areas of the island stymied — a testament to the robust economic state of the Kapolei region.
Finally, a business looking for industrial real estate will find that Kapolei offers more choices when it comes to finding an ideal site that is environmentally clean, with the latest technology and new infrastructure connections in place, and with a clean start to build new, functional and efficient buildings to meet the requirements of the business.
What are the main challenges Kapolei businesses are facing, from your perspective?
Any challenges our businesses may have in Kapolei are the same challenges faced by businesses everywhere. Access to capital and financing, navigating the permitting process, and managing the construction process are issues faced by businesses everywhere.
From a regional perspective, there is a tendency to forget that growth is being directed to Kapolei to manage future growth on this island and the area could benefit from a renewed interest from government to look at ways to further Kapolei’s development as a job center so that more people can work where they live which should redirect the flow of traffic and alleviate congestion.
How can these challenges be overcome?
At present, Kapolei businesses are working with our elected officials to put together a package of incentives that further enhances the existing benefits of doing business in the Kapolei region. Businesses expanding to Kapolei Business Park will find support from Avalon Development’s team of experts in financing, design, permitting and construction to ease their starting point.
How can Kapolei become the Second City it was envisioned to be?
Government will play an important role in building the city. For example, instead of purchasing Alii Place in downtown Honolulu, the state should support its own longstanding policy of directing growth to Kapolei.
Rather than centralizing state offices in Downtown Honolulu, the state should look at developing another office building in Kapolei. Not only will the state relieve traffic congestion with this action, the state would most likely get better value for its investment. More government activity in Kapolei will attract more businesses to Kapolei and eventually the number of jobs will catch up with the number of people who live in the area. It’s a win-win.