Ala Moana, Ward Centers owner facing ...

Ala Moana, Ward Centers owner facing bankruptcy - Business

There are 74 comments on the Honolulu Star-Bulletin story from Nov 12, 2008, titled Ala Moana, Ward Centers owner facing bankruptcy - Business. In it, Honolulu Star-Bulletin reports that:

General Growth Properties Inc. , owner of Ala Moana Center and Ward Centers in Hawaii, said yesterday it is facing the possibility of bankruptcy if it fails to refinance or extend nearly $1 billion in debt due ...

Join the discussion below, or Read more at Honolulu Star-Bulletin.

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Depressed

Hilo, HI

#1 Nov 12, 2008
I always wondered how these mainland firms could afford to buy Ala Moana from Japan.
Just like the typical American Ala Moana acts high end but has no money and is in serious debt.
Charles

United States

#2 Nov 12, 2008
Yeah very badly managed company.
huh

Hilo, HI

#3 Nov 12, 2008
Depressed wrote:
I always wondered how these mainland firms could afford to buy Ala Moana from Japan.
Just like the typical American Ala Moana acts high end but has no money and is in serious debt.
I didn't read in the story that Ala Moana is suffering problems --- do you care to share your source?
etops

Oklahoma City, OK

#4 Nov 12, 2008
Yet another case of "TOO BIG" wanting a bigger piece of the pie.
observer

Vancouver, WA

#5 Nov 12, 2008
When I go, the two far ends of the mall and the food court is okay for me. the rest of the stores don't have anything I need.
Ex-Teacher

Mililani, HI

#6 Nov 12, 2008
If you've got General Growth gift cards, you had better use them before they file for bankruptcy. After that they won't be worth anything.
Shiro

Hilo, HI

#7 Nov 12, 2008
huh wrote:
<quoted text>
I didn't read in the story that Ala Moana is suffering problems --- do you care to share your source?
Ala Moana is a big problem. All the debt taken out for purchase and renovation can't be paid back.
The owner of house is in default even though the renter is paying rent. The rent doesn't cover the debt payment. Can't refinance.
Same thing.
macuu222

Kamuela, HI

#8 Nov 12, 2008
I was at Ala Moana Center last week and I thought the place was closed! IT WAS NOON ON A WEDNESDAY..... and there was no one in sight. Nordstroms was a ghost town.... and even the food courts had very few people compared to what they usually have. It was like I had the whole mall to myself...only I didn't have any money to buy anything.
local

Honolulu, HI

#9 Nov 12, 2008
I hope General Growth goes into bankruptcy. They been milking the tenants in rising rents and forcing the original tenants whom was bringing in the shoppers to the mall to move out. They thought by bringing in the high end stores will lure more locals to the mall. Think again GM Yoshimura. Your days are numbered like your company. Ask any tenants on this situation, and they're laughing.
Sarah

Los Angeles, CA

#10 Nov 12, 2008
So what are the expenses of the owners, besides utilities and taxes, low paying maintenance people and a few people who 'manage'? Guess they have payments for the property itself. So maybe they paid too much for it?
Wards does not have as many shoppers as Ala Moana, which is always packed with people.

Wonder if they actually built the new Nordstroms, would not think so but that would be a major expense. So maybe that is the expense they mean. Seems like all they do is take in the rent and empty the trash cans. So what is their major expense which is causing them financial distress?
I work in tourism

AOL

#11 Nov 12, 2008
I work in the tourism industry and naturally
I am very worried at the slump in visitors arrival.
I keep all articles and write ups about the industry. There is an article published by the Star Bulletin that semm to be right on the money in predicting what is happenning. I will share it with you.

"Hawaii had a perfect niche with the average American visitor. They were coming to Hawaii because of its good weather, lovely beaches, affordable accommodation, relaxing atmosphere, colorful shops selling local souvenirs and many little restaurants where visitors could eat at a reasonable price.

Then it all changed. The Japanese tourist arrived with their appetite for designer clothes and designer accessories and we got mesmerized and seduced by their spending power. Quick thinking developers and shortsighted hotel executives rushed to redesign Hawaii. Gone were the affordable family hotels, the affordable eateries and the cute although somewhat 'passe' little shops.

They were replaced by pompously redecorated and refurbished hotel lobby's and, although the rooms remained basically the same size (small), the rates skyrocketed out of reach for the traditional American visitors that have provided our bread and butter for many years. We have "beautified" Waikiki with upscale shops selling merchandise that very few people can afford and "trendy" restaurants with prices
that are off limit for many of us. Someone thought "We have a new image now, the rich visitors are coming."

But in this excited rush to change someone forgot some basic realities:

1. People with spending power have the power to spend their money wherever they like.

2. To cater for high spending visitors one must have all the infrastructures and amenities that high
spenders are looking for. A few redecorated hotel lobby's and luxury shops don't make the cut.

3. We have great weather. But if people come here for the weather, naturally they want to go to the beach.
Has anyone looked at the state of our beaches lately?

Now the people with spending power seem to have moved on in search of a new paradise, new
and better playgrounds or whatever else they are looking for. We have turned our back on the traditional
visitor that had a more modest budget to spend, however, it was these visitors who provided a steady income for our economy and they regarded Hawaii as paradise.

Did someone goof and get the whole planning scenario wrong? It sure looks like it.

So, what is the solution? The solution may be that we need to go back to the drawing board and
return to the way we were. Hotels, shops, restaurants etc need to bite the bullet, recognize that Hawaii is not a place for "high rollers and big spenders" and realign the price structures to be more in step with today's market realities.

Get rid of these strategic thinkers that probably did very well for themselves but created the mess
that we are in now by making us believe that our reach is as good as our grasp. It is not. Going back to basics may create a temporary financial loss but it will be far more achievable and less painful than stubbornly continuing down this high road that leads to nowhere.

The State and the taxpayer should not have to rescue a failing strategy that led to macroscopic
misjudgments."




Ala Moana

United States

#12 Nov 12, 2008
Ala Moana is so dreary. It's not the sunny, airy, open, local place that it used to be. I used to shop and eat there a couple of times a month. Now I only go there 2 or 3 time a year.
LauLau

AOL

#13 Nov 12, 2008
Choke!!!!!!!!
picking on wrong guy

Honolulu, HI

#14 Nov 12, 2008
local wrote:
I hope General Growth goes into bankruptcy. They been milking the tenants in rising rents and forcing the original tenants whom was bringing in the shoppers to the mall to move out. They thought by bringing in the high end stores will lure more locals to the mall. Think again GM Yoshimura. Your days are numbered like your company. Ask any tenants on this situation, and they're laughing.
Ala Moana is not the problem - GG's problems are debts on their Mainland developments. Ala Moana is one of their best holdings and will continue to be so.
picking on wrong guy

Honolulu, HI

#15 Nov 12, 2008
Shiro wrote:
<quoted text>
Ala Moana is a big problem. All the debt taken out for purchase and renovation can't be paid back.
The owner of house is in default even though the renter is paying rent. The rent doesn't cover the debt payment. Can't refinance.
Same thing.
Again, Ala Moana is NOT the problem!
Killa Wiffa

AOL

#16 Nov 12, 2008
Hardly anyone shops at Ward anymore!!!!!!!!
BillionsForRail

Honolulu, HI

#17 Nov 12, 2008
huh wrote:
<quoted text>
I didn't read in the story that Ala Moana is suffering problems --- do you care to share your source?
The company that owns Ala Moana is suffering and they will file for bankruptcy because of the multi-billions they are in debt.

Do you know the multi-billion dollar rail will end at the Ala Moana Center and skip Waikiki and UHManoa?(no extra multi-billions to build those sections)
R-Dizzle

Honolulu, HI

#18 Nov 12, 2008
Agree with "I work in tourism" and "picking on wrong guy". Ala Moana and Ward are money makers. Just because "locals" don't shop there, don't mean that tourists aren't shopping there - you'd be suprised if you look at actual numbers of daily retail sales.

I've always had a negative view against Nordstrom - I don't understand that store at all. We have a Sears (low end), a Macys (middle), and a Nieman Marcus (high end). Nordstrom has no "retail" market niche in Ala Moana and doesn't belong there. Should've built the sucker in the Royal Hawaiian Shopping Center.

I think executives tried to turn Ala Moana and Ward areas into an L.A./West Hollywood/O.C. type of area but failed miserably. If tourists wanted to go to the O.C., they would go there! There's nothing unique about Hawaii anymore - it's all upscale, trendy, and "Southern California-ish". Instead of trying to create a unique niche, execs replicated Southern Cal and it turned out tacky (Hawaii will never be SC). It's not a suprise that mainland tourists have decreased in numbers over the years. Why fly all the way to Hawaii? Just drive to Southern Cal - it's the same thing.
makaiman

Eugene, OR

#19 Nov 12, 2008
Can you say...DISFUNCTIONAL? this corporation has been mismanaged for years. I know by personal experience on Maui. I'm sure we'll bail them out with our tax $$$.
I work in tourism

AOL

#20 Nov 12, 2008
R-Dizzle wrote:
Agree with "I work in tourism" and "picking on wrong guy". Ala Moana and Ward are money makers. Just because "locals" don't shop there, don't mean that tourists aren't shopping there - you'd be suprised if you look at actual numbers of daily retail sales.
I've always had a negative view against Nordstrom - I don't understand that store at all. We have a Sears (low end), a Macys (middle), and a Nieman Marcus (high end). Nordstrom has no "retail" market niche in Ala Moana and doesn't belong there. Should've built the sucker in the Royal Hawaiian Shopping Center.
I think executives tried to turn Ala Moana and Ward areas into an L.A./West Hollywood/O.C. type of area but failed miserably. If tourists wanted to go to the O.C., they would go there! There's nothing unique about Hawaii anymore - it's all upscale, trendy, and "Southern California-ish". Instead of trying to create a unique niche, execs replicated Southern Cal and it turned out tacky (Hawaii will never be SC). It's not a suprise that mainland tourists have decreased in numbers over the years. Why fly all the way to Hawaii? Just drive to Southern Cal - it's the same thing.
It is not my article.

The guy that wrote it, is Franco Mancassola.

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