Building Industry, May 2010

Although the past year has proved challenging, not just for new construction but also for renovation
and remodeling, several projects did manage to provide work for the industry, albeit a bit scaled down.
Now, as more articles surface reporting the beginnings of a recovery, at least nationwide,
are more owners willing to push forward with larger plans?
Or are financiers not as optimistic as economic forecasters? Read on and see…

Looking Long Term

Despite being hardest hit, the tourism sector continues to make plans and move forward on renovation, expansion and redevelopment plans.
Most recently, the Hilton Hawaiian Village Beach Resort & Spa unveiled on March 31 its ambitious multiyear master plan, which includes the construction of two new timeshare towers that will add approximately 500 units to the vacation ownership pool as well as expanded retail and restaurant space and upgraded amenities.

“The … project comes at an opportune time,” said Jerry Gibson, Hilton’s area vice president, at the March press conference. “It will add a new vibrancy to the entrance of Waikiki, adding to the state’s tax base, creating long-term visitor industry jobs and providing our beleaguered construction industry with hundreds of quality jobs.”

The plan calls for the repositioning of retail spaces throughout the property, reorienting the retail area beneath Tapa Tower and upgrades to the 46,000-square-foot Rainbow Bazaar. The final phase includes a new, two-story retail complex that will eventually replace the bazaar.

Also part of the plan is the expansion of the existing 10,000-square-foot Super Pool and Paradise Pool (which includes a 77-foot resort slide) and construction of separate children’s pools, complete with water slides, and new adults-only pools with waterfalls and ample deck space, allowing for numerous cabanas and chaise lounges.

The lobby area and front desk will be renovated to maximize visual interest toward the pools and beach beyond.

As for the new high rises, the first 37-story, 300-unit tower is proposed to be located Diamond Head of the current Tapa Tower, near the bus depot and the second 250-unit tower will be included in the redevelopment of the existing Rainbow Bazaar.

Hilton has started the environmental review process, anticipated to take 18 to 24 months.

“The village will retain its park-like setting with 50 percent of its 22 oceanfront acres remaining open space,” says Jeff Overton of Group 70 International, project planner. “We also will perpetuate the celebration of the Hawaiian sense-of-place … through the use of native Hawaiian-inspired elements in the architecture, paintings, sculptures and other artwork displayed throughout the property as well as by featuring indigenous plants in the landscaping.”

Also in March, Kyo-ya Hotels & Resorts, LP submitted the final Environmental Impact Statement (EIS) for the last phases of its redevelopment plan that included the recently completed renovations to The Royal Hawaiian and Sheraton Waikiki hotel. The EIS covers two other Kyo-ya owned properties in Waikiki: the Sheraton Princess Kaiulani Hotel and the Diamond Head annex of the Moana Surfrider.

At the Princess Kaiulani, the Ainahau Tower will be upgraded with newly renovated facilities and amenities, and the Pikake Tower will be demolished and rebuilt. The new tower will feature 61 residential units and 210 vacation villa units. Initial plans also call for the repositioning of a newly constructed retail promenade to allow for additional public open space, including a 28,300-square-foot public plaza on Kalakaua Avenue and 9,100-square-foot plaza on Kaiulani Avenue. The layout of the property will be reconfigured to improve traffic flow, and a new 812-stall parking complex added.

Adjacent to the historic Banyan Wing of the Moana, a new Diamond Head Tower featuring 185 hotel rooms and 40 residences will replace the existing eight-story annex building. The orientation of the new building is expected to open up significant ocean views along the Kaiulani corridor. As with previous phases, WCIT Architecture is the lead design firm for these projects.

“Kyo-ya’s redevelopment in the heart of Waikiki will have a tremendous impact on our local economy by providing short-term construction jobs, long-term hospitality jobs and significantly increased revenue to the state,” says Greg Dickhens, executive vice president of Kyo-ya. “The new beachfront product and renovated properties will offer experiences that will attract guests who might otherwise have decided to travel to another vacation destination.”

In addition, Kyo-ya recently announced its plans to also redevelop the Sheraton Maui Resort & Spa, once again with WCIT Architecture. The hotel owner intends to add 410 units (270 new apartment-hotel and 140 new multifamily residential units) while also renovating the existing Molokai Wing, presidential suites and Cliff Tower Wing.

Kyo-ya’s final phase of redevelopment in Waikiki includes
renovating an existing tower at the Sheraton Princess Kaiulani as
well as demolishing and building two new towers, one at Kaiulani
and another adjacent to the Moana.

Perhaps exempting Hilton and Kyo-ya’s plans, Glen Kaneshige of Nordic PCL Construction, Inc., says, “I believe that businesses are more inclined to renovate their existing facilities during a recession rather than considering new construction since renovation will usually require a smaller capital investment. I believe the hotels are looking for the earliest indicators of a sustainable recovery in tourism before funds get committed to major renovations of their existing facilities.” The firm recently completed the second phase of renovations at the Sheraton Waikiki hotel. “Ideally, the hotel renovation work would commence while the vacancies are higher and completion of the improvements would be in time for the return of tourists to help lift Hawaii out of this recession,” Kaneshige adds.

Short-Term Brilliance

But Hilton and Kyo-ya are not the only ones taking advantage of the favorable conditions (in terms of construction) to make enhancements to their product, though many projects are on a somewhat smaller scale, relatively speaking.

“For hotel owners, who are facing high vacancies and lower room rates, this is a perfect time to get the work done with little to no disruption of operations and the guest experience,” says Mike Betz, vice president of Pankow, which is doing remodeling work at Aston Waikiki Sunset and New Otani-Kaimana Beach Hotel. “It is also a good time to do what we call the ‘20-year tune-up,’ that is, owners repositioning their properties to attract tenants.”

The Grand Hyatt Kauai Resort & Spa recently contracted dck pacific construction, LLC for its complete guest room renovation beginning in April 2010. The comprehensive project includes replacing the wall coverings, flooring, curtains, furniture and décor as well as revamping of the bath and shower area and installation of either walk-in showers or shower-bath combinations. The new bathrooms will feature marble countertops, rain style showers and marble tile flooring.

Architects Wimberly Allison Tong & Goo chose materials reflective of the island’s culture and climate through the use of mahogany furniture, linens inspired by traditional kapa prints and plantation-style window shutters. Environmental initiatives also are being incorporated into the project, including LED lighting in the bath and vanity area, low-flow toilets, low-VOC paints, carpeting with recycled yarn and efficient ceiling fans.

The fast-tracked project will occur in phases, with entire building wings being closed at a time. Comple- tion is expected at the end of the year.

“Renovation work will always be a key component of dck pacific’s organization,” says Roger Peters, the company’s executive vice president and general manager. “We have a team of workers that specialize in this type of work. They understand the requirements of working in an environment where the uninterrupted operations of the client are priority.”

Describing the current market for renovation projects, dck’s Lane Uchimura, senior vice president of commercial and special projects, says, “Tight financing and business uncertainty is helping to slow down the amount of projects available. Properties are assessing the type of product that they offer and balancing it with the rate of return that they can expect in the future. Very few large projects have come on the market recently. Financing and budgets are still identified as major hurdles to projects moving forward.”

dck also is nearing completion on the $50 million renovation of 356 guest rooms and public spaces at the Kauai Marriott Resort. All guest room and food & beverage areas are complete, according to Uchimura, with all other work – porte cochere extension and children’s pool area – to be done by the end of June.

Marriott also just completed the installation of a new gridsmart solar panel lighting system in the outdoor parking lot of the Waikiki Beach Marriott Resort & Spa, reducing the hotel’s power consumption from 30,000 watts to 12,000 watts a day. The system harnesses enough solar energy to power more than 45 percent of the needed electricity to run the lights at night.

Also embarking on a renovation project is the Sheraton Keauhou Bay Resort & Spa. In-room enhancements at the 521-room, 22-acre oceanfront resort on the Big Island include new carpeting, 37-inch flat-screen televisions and interior painting. Another key component of the renovation is a redesign of a public area to incorporate Link@Sheraton, an information technology lounge.

On the flip side, recently completed renovation projects include the following:

a $6.6 million lobby and guest room transformation at the OHANA Waikiki Malia hotel
the grand reopening of the newly rebranded Ramada Plaza Waikiki (formerly Holiday Inn Waikiki), which recently underwent a $3 million renovation of all guest rooms, corridors, pool deck area and a “green” laundry room
renovations at King Kamehameha’s Kona Beach Hotel, done by general contractor Allied Builders System and completed in March; the comprehensive hotel transformation included extensive enhancements to the guest rooms and public areas, including new pool, front entry and retail space (Editor’s note: Look for more detail about this project in a future Spotlight on Success feature.)

Public Sector Work

Describing the renovation market overall, Pankow’s Betz says, “Because of the overall uncertainty in the marketplace, property owners are hesitant to do anything; i.e., construction is lagging in renovations as well. That said, owners do recognize that the time is now to get good value for labor and materials. The majority of renovation projects we see going forward generally fall into two categories: aging properties that have to modernize and have the capital to do it, and public sector and healthcare projects.”
“Shovel ready” public sector projects are getting boosts from American Recovery and Reinvestment Act (ARRA) funds, one of which is the modernization and renovation of the Prince Jonah Kuhio Kalanianaole (PJKK) Federal Building and U.S. Courthouse, a project for which $121 million in ARRA monies has been allocated, procured through the U.S. General Services Administration (GSA).

The federal complex built in 1977 will be upgraded to meet required energy performance standards and the interior spaces “will be altered to result in a more modern and efficient facility. To be done by general contractor Swinerton Builders, the project will include replacement of most of the air cooling and circulation systems, major upgrades to the electrical power systems, alarm systems and other life-safety capabilities, new ceilings and lighting, renovation of the restrooms and associated plumbing, sealing and refinishing of deteriorated areas and reworking of the fire sprinkler systems along with ADA (Americans with Disabilities Act) improvements,” describes the GSA.

The architect is Gensler Architects of San Francisco, Calif., in association with Honolulu-based Clifford Planning, LLC.

“The intent is to make the PJKK federal courthouse more energy efficient and achieve a LEED-silver rating,” explains George Ehara, vice president and division manager for Swinerton. “The recovery money has to be committed within a certain timeline, so there is definitely a sense of urgency on the government’s side to commit these funds and ‘save or create’ construction jobs.”

Regarding renovation work in general, Ehara adds, “In this market it is less expensive to renovate an existing building rather than build a new building, so the mix of new construction to renovation is definitely favoring renovation work right now. That being said, with the lack of available credit and the overall recession, both markets are down this year, so renovation work is not making up for the lack of new construction. Many owners are taking advantage of the competitive bidding environment to catch up on their repair and maintenance work, but some of the larger renovation projects are being delayed due to the tight credit market. We hope that changes in the near future.”

The Notice to Proceed from Maui Community College’s Science Building was expected in April 2010.

In her address to the state Legislature in February, M.R.C. Greenwood, president of the University of Hawaii (UH), announced the “Project Renovate to Innovate,” the goal of which is, said Greenwood, “to rebuild the school’s infrastructure, bring indirect cost rates in line with peer institutions and increase creation of small businesses based on UH technology developments.”

In keeping with this, UH has approximately $218 million worth of projects, according to Brian Minaai, associate vice president for capital improvements for the UH system. “Many of these projects are smaller R&M projects; however, there are several larger and high-profile projects included in the total.” They include:

Manoa’s Campus Center complex addition (bid opening in May 2010, estimated $31 million)
Hilo’s Student Services building addition (bid opening April 2010, estimated $22 million)
Manoa’s Johnson Hall general repairs (Notice to Proceed projected for May 2010, estimated at $8 million)
Windward Community College’s Library and Learning Resources Center (Notice to Proceed expected in April 2010, estimated $20 million)
Maui Community College’s Science Building (Notice to Proceed expected in April 2010, estimated $22 million)

“Despite the challenging economy, the university has utilized its ability to issue revenue bonds to finance CIP projects,” Minaai continues. “The current economy makes it an opportune time for the university to undertake renovations or remodeling projects. We have observed a number of bids on projects that are significantly lower than original construction estimates. These ‘savings’ particularly for R&M projects, allows the university to undertake more projects to create conducive learning and working environments for the university community.

“Facilities provide the centerpiece around which all other educational activities exist at higher education institutions,” adds Minaai. “The total replacement value of all UH facilities is estimated at $4 billion. Therefore, it is imperative to reinvest in the university’s physical plant to ensure that the physical infrastructure facilitates the mission of the institution.”

A UH project nearing completion is the phase two of the modernization of the Hale Aloha dormitory complex. General contractor Nan, Inc. is doing the safety, security and electrical upgrades in the Hale Lokelani and Hale Lehua towers of the complex. The project involves upgrading the towers’ safety, security and electrical systems. Also included in the project are renovations to comply with current ADA standards. Begun in the summer last year, the project is slated to be completed in July.

Nan is transforming a historic hangar on Ford Island into the Pacific Regional Center and Sea and Animal Research Center for the NOAA.

Nan also is working on the renovation of Building 130 for the National Oceanic and Atmospheric Administration (NOAA) on Ford Island. “The contract amount is approximately $23 million and is expected to be complete in April 2011,” explains Ryan Nakaima, vice president of Nan. Work involves transforming a historic hangar on Ford Island into the Pacific Regional Center and Sea and Animal Research Center for NOAA.

The new facility will allow NOAA to conduct research functions and it will contain multiple live-animal seawater tanks, a seawater production well, staff offices, high-bay warehouse storage with a mezzanine and an air-conditioned storage area.

“This project is not typical at all in that observation booths are being constructed around fish tanks, well houses and support facilities,” explains a project spokesperson. “In addition to the life support systems, the renovation of the hangar will involve major restoration. Instead of demolishing the facility and building a new complex, items such as the windows are being rejuvenated and kept in the facility to maintain its historical identity. Also instead of removing and constructing a new roof with newer materials, the 2-inch tongue-and-groove roof is being repaired and retrofitted with photovoltaic and solar panels. In essence the whole hanger is being taken apart and put back together with the same (World War II era) characteristics and regal charm.”

“All military projects do focus on being green regardless if it is new construction or renovations, big or small,” adds Nakaima. “A trend we have also seen is the increasing emphasis on systems that utilize renewable energy and how they can help building operating costs become more independent from the rising prices of fossil fuels. This is, of course, in addition to being more environmentally friendly.”

Nordic PCL is completing the renovation of the Hickam Air Force Base Shopping Center for the Army Air Force Exchange System (AAFES), says Kaneshige, which involves upgrading the interior spaces of a 30-year old building.

Albert C. Kobayashi is performing the interior and exterior renovations at Kukui Gardens. Several buildings of the affordable housing complex have already been turned over.

General contractor Albert C. Kobayashi, Inc. continues its renovation of the state’s Kukui Gardens affordable housing complex, which was temporarily stalled earlier this year. ACK is renovating a little less than 400 units, primarily cosmetic work of the unit interiors, including cabinetry, kitchens, bathrooms, flooring and painting as well as exterior painting and landscaping of all buildings, about 20, according to Russell Young, company president and CEO. “I think we’ve hit rock bottom,” says Young, when asked about the current economic picture, “but it will take awhile for us to get back up. There’s a lot of work out there; it just depends on when the money will free up.”

S & M Sakamoto’s current public sector renovation work lies primarily with schools. They include whole school renovations at Kanoelani, Hahaione and Kamiloiki elementary schools, Waipahu Intermediate School and Kaiser High School, all of which consist of upgrading building exteriors and classrooms on campus. S & M also recently replaced 12 greenhouse buildings for the University of Hawaii Magoon Laboratory, a $4.23 million project completed last year.
Twelve greenhouse buildings for the University of Hawaii Magoon Laboratory were replaced by S & M Sakamoto.

“There is a tendency for more renovation projects during a recession because the ticket price of the project is typically less than for new construction projects,” states Dale Yoneda, vice president of S & M Sakamoto; however, “tight financing has hindered work - there is no doubt about that. Fortunately, there are still sizable renovation projects on the market, investors see the importance of maintaining their properties for current and future clients. It seems as though the renovation projects we are involved in want to modernize and upgrade the appearance/functionality of the property while still maintaining the original atmosphere or feeling generated when the original structure was created.”

Fit for Life

Glen Kaneshige of Nordic PCL comments that healthcare is another area of demand for renovation work. “Healthcare groups continue to upgrade their current facilities to meet increasing demands and regulatory requirements,” he explains.

Phase II of Kaiser Permanente’s expansion of the ancillary wing of its Moanalua Medical Center will be completed in 2011. Shown here is the rendering of the fourth floor waiting room.

Kaiser Permanente Hawaii announced in January its plans to move forward with the second phase of the expansion and renovation of its Moanalua Medical Center.

With Swinerton Builders as the general contractor and Lionakis as the architect, the $140 million renovation of the six-floor ancillary wing is expected to start this spring. Work includes refurbishing 158,000-square-feet of existing space and the addition of more than 80 patient beds, family waiting areas on every patient-care floor (third to sixth), a meditation room on the fourth floor, cutting edge imaging technology and an outdoor garden lanai. Also included is installation of a state-of-the-art patient lift system in patient rooms and revamped wayfinding system to make it easier to navigate through the hospital.

Intended to continue the look and feel of the new tower, which was completed in April 2008, the renovated wing utilizes soft, warm colors and design themes by floor: orchid (sixth floor), kukui (fifth), water (fourth), bamboo (third) and palm (second floor), with elements that depart from more traditional sterile environments and are more conducive to patient recovery.

“Our members expect and deserve newer state-of-the-art facilities, so in addition to creating jobs and planning for growth, this next phase of our expansion and renovation project continues our commitment to making quality care accessible to all,” says Susan Murray, Kaiser Permanente’s regional hospital administrator and vice president of Quality and Service.
The renovation is anticipated to be completed in late 2011.

The former Panasonic building in Halawa will soon be the new headquarters for Diagnostic Laboratory Services.

Diagnostic Laboratory Services, Inc., recently contracted Architects Hawaii, Ltd., Allied Builders System and Hoku Solar, Inc. to renovate the former Panasonic warehouse in Halawa for its new clinical testing laboratory and install an innovative combined photovoltaic and diesel generator system. To accommodate parking needs, a floor will be added inside the existing building.

Describing some of the design elements, Architects Hawaii’s Dean Takasato says, “We created large expanses of glass to ‘showcase’ their lab functions, which also serve as a way to connect their administrative spaces across the corridor to their lab functions. The administrative spaces also have a lot of storefront, yet provide some level of privacy.”

The $20 million renovation is scheduled for completion in the fall with Diagnostic Laboratory Services completing its move into the new 84,000-square-foot facility in December 2010. In addition, the generator system will help contribute to the state’s sustainability goals and ensure 24/7 power for the laboratory. The PV system is expected to produce up to 339 kilowatts of peak power and more than 490,000 kilowatt hours of solar electricity annually.

“We are very excited about this warehouse space, which gives us the opportunity to remodel an entire building specifically for us, to include potential for future growth,” comments Richard Okazaki, president and CEO of Diagnostic Laboratory Services. “We can now bring in new tests to meet physician and patient demand, something that would have been difficult if not impossible in the smaller space we now have at Dole in Iwilei.”

These projects are in addition to the massive expansion of the Kapiolani Medical Center for Women and Children, for which a capital campaign is under way (see BI December 2009) and the ongoing expansion of Shriner’s Hospitals for Children, which celebrated the completion of the main hospital building last year and is proceeding with two additional buildings, expected to be completed in 2011.

And the Kitchen Sink

The new “home” for Catholic Charities Hawaii was officially blessed by Bishop Clarence “Larry” Silva (center).

Other ongoing or recently completed renovation projects in the private sector include the following:

Catholic Charities Hawaii celebrated the dedication of its new Clarence T.C. Ching campus on March 31, following a extensive renovation completed by general contractor Robert M. Kaya Builders, Inc. The $28 million renovation nearly doubled the square footage of the largest building on the campus. The project, designed by Mitsunaga & Associates, also incorporated a number of green features, such as energy-efficient plumbing, low voltage and energy-saving lighting, solar windows and energy efficient mechanical equipment. (Editor’s note: Read more about this project, including more pictures, online. Visit www.buildingindustryhawaii.com.)
Kamehameha Schools recently completed renovations to its 27-unit Rainbow Vista apartment complex and is nearing completion on work at the Waiakamilo Business Center. Renovations to Kapalama Shopping Center are under consideration.
•Expansion of the Waikiki Shopping Plaza, being done by Swinerton, is on schedule for completion in June. The project was topped off in April, according to George Ehara.
The former Weyerhauser building across from Best Buy in Iwilei is undergoing extensive renovations for new owner Ba-Le Bakery & Sandwich shop. Though much of the space is slated for Ba-Le’s operations, including a new restaurant and bakery, 11,000 square feet of the building is being leased to Party City and another 4,000 square feet to Boulevard Saimin.
Arita-Poulson General Contracting recently completed renovations for Whole Foods Market on Maui. Located in the space formerly occupied by Star Market in Maui Mall, the store is more than 26,000 square feet in size.
Overall, despite tight financing, many forward-thinking owners are taking advantage of competitive prices to move forward with renovation and remodeling projects, believing that investing now will leave them better poised for the coming recovery.

Paradigm Shift

Rider Levett Bucknall hosted a seminar on March 23 at the Oahu Country Club entitled “The Road Ahead: Mapping Construction Industry Trends for 2010 and Beyond,” given by Julian Anderson, company president.
Beyond sharing his forecast.......

EPA Mandate

April 22 was the deadline for contractors to obtain EPA (Environmental Protection Agency) certification under its Lead-Based Paint Renovation, Repair and Painting Program.
Construction firms, especially painters, plumbers, carpenters and electricians, must......