The Festival Companies to Develop The Royal Hawaiian Shopping Center

May 11, 2004

Contributed by Kekoa Paulsen

The Festival Companies was selected because of their full array of shopping center services and their ability to develop a vision to transform the center and restore a Hawaiian sense of place. "Festival's proposal showed great sensitivity and understanding of this historical and culturally important asset," said Susan Todani, director of investments for KS. "We believe that Festival will assist KS in its mission to appropriately steward this asset and restore the center to its former prominence in Waikiki." Festival is a full-service shopping center developer, property manager and advisory services firm based in Los Angeles, California. In addition to developing the center, they will also take over the property management services from Pauahi Management Company (PMC) starting in July. Festival has started to conduct interviews with PMC staff and expects to retain many of these employees through the transition. Colliers Monroe Friedlander will continue to be the exclusive leasing agent for this project. They will work under the supervision of Festival who will also provide the overall leasing strategy and oversight for KS. "We were impressed at the progress and new ideas developed by Festival since the project was officially approved and announced in February of this year," said Kirk Belsby, vice president for Endowment. "We look forward to working with Festival as the redevelopment project unfolds over the next two years." "Festival is inspired by Kamehameha Schools' dedication in expressing its cultural heritage and instilling Pauahi's legacy into the core fabric of the redevelopment," said Rosalind Schurgin, principal of The Festival Companies. "We will carry the torch of the KS mission, which is also our mission. No other place can boast the sense of history and unbeatable Waikiki location. We view this as a wonderful opportunity to restore the center as a landmark destination in Waikiki by combining a rich cultural experience with the best of shopping, dining and entertainment for both residents and visitors to enjoy." The Festival Companies has developed more than $1.5 billion of retail properties in selected markets nationwide. Its development track record includes over 100 retail projects including regional malls, entertainment centers, street retail, and open air centers. Festival has an extensive background in redevelopment that has spurred revitalization and economic development in many communities. Festival recently completed Buena Park Downtown, located adjacent to Knotts Berry Farm, California and provided real estate advisory services in The Third Street Promenade development, Santa Monica, and The Gas Lamp District in San Diego. The Royal Hawaiian Shopping Center consists of 290,000 square feet along a three-block stretch on Waikiki's famed Kalakaua Avenue. The center fronts the Sheraton Waikiki and Royal Hawaiian Hotels. This is the first major renovation for the 24-year-old center. Architectural firms Wimberly Allison Tong and Goo (Honolulu) and Callison Architecture (Seattle) will spearhead the redesign. According to Todani, "Hawaii's tourism industry is quickly rebounding and analysts expect strong growth, fueled by a steady increase in the U.S. visitor market and by the recent recovery of the Japanese economy and increased spending by Japanese visitors." Kamehameha Schools is a private charitable trust founded and endowed by the legacy of Princess Bernice Pauahi Bishop. KS is the largest private landowner in the state of Hawaii and is the sole beneficiary of the Bernice Pauahi Bishop Estate, which has an estimated value of $6.1 billion. KS operates a statewide educational system and currently, more than 5,700 students of Hawaiian ancestry are enrolled in K-12 campuses on three islands and at more than 30 preschool sites statewide. An additional 145,000+ Hawaiian learners are also being served through a range of other Kamehameha Schools outreach programs, distance learning programming, community collaborations and financial aid opportunities in Hawaii and across the continental United States.