Editor’s Note: This story has been updated to reflect that resolution to authorize a multi-year lease on the old Safeway building only requires one affirmative vote (reading) by the full County Council.
Editor’s Note: This story has been updated to reflect that resolution to authorize a multi-year lease on the old Safeway building only requires one affirmative vote (reading) by the full County Council.
The county is looking to rent the former Safeway space at Prince Kuhio Plaza, despite some concerns about occupying one of only a few large empty retail spaces in Hilo.
A County Council committee on Tuesday approved a resolution to rent the East Puainako Street location to jointly house its Office of Aging and Office of Housing and Community Development starting July 1. The resolution requires one full council reading to pass.
The county says moving the two offices into one building will save an estimated $2.4 million over the duration of a 10 1/2-year lease. Annual rent would start at $573,112.50 and increase about 3 percent annually to $747,781.82 in the last year. The lease would have an option for a 10-year extension.
“What we’ve done is, we’ve tried to take a proactive approach, looking at our maturing leases (and) looking at our rate structures,” county Property Manager Hamana Ventura told committee members. “And in doing so, we’ve come to the conclusion that, if we have the opportunity to consolidate some of our leases and save ourselves some money down the line, I think it’s a better, stronger and stable position for the county going forward.”
The 39,525-square-foot space previously housed Safeway until the grocery giant moved less than a mile away to a new location on Makaala Street. It’s been unoccupied since, though Safeway still holds the lease. The county would be a “replacement tenant” for Safeway, Ventura said.
The county’s housing office currently is split between two locations — the Hilo Armory, which is free, and a location on Kinoole Street, which it rents for about $110,000 per year.
The county also pays $538,000 annually to rent space for its Office of Aging. County Finance Director Deanna Sako said that lease is ending and “the proposal is to escalate (the cost) significantly.”
Hilo Councilman Aaron Chung had concerns.
The former Safeway space is located in a “retail area,” Chung said, and he thinks “we should keep it (that way) … just for the vitality of Hilo.”
Chung also noted the spot has been unoccupied for a while, indicating the county potentially could negotiate a better deal on rent.
Chung also questioned if the county had considered building a new location instead of renting.
“I’d like to see some other commercial guys move into that space (or) we’re not going to have room for others to move in,” Chung said. “… I’m just worried about the inventory of retail space here in Hilo.
“I’m going to support this but really half-heartedly, I’ve got to say,” he later added. “I really think if we’re going to spend this kind of bread, spend a little bit more and build your own.”
Hilo Councilwoman Sue Lee Loy applauded the concept for creating a “one-stop shop for our kupunas.” She noted the Longs Drugs pharmacy is located conveniently next door with other shopping nearby.
“I think it’s a good fit,” Lee Loy said. “But I also think we do have to look around the corner a little bit more as far as, what master plan our county facilities should look like in the next five and 10 years … How do we relay the rest of our county facilities and services from this area?”
Ventura said statistics show big-box retailers are dwindling and “there may be more retail space coming back online if we’re watching the national trends.”
“We may be filling in space to help provide income and services in an area that actually needs it,” Ventura said.
The space would need an estimated $2 million in improvements prior to occupancy, though that number is still in flux.
Ventura told the Tribune-Herald the building owner would cover about $800,000 of those improvement costs.
Sako said the county is still vetting other possibilities but building a new location is “a little hard because we don’t have land in the area.”
“We’re looking at a lot of different options as we’re evaluating the leases — this is one of them,” Sako said. “We have other departments that would like to move or have more space as well so we’re looking at buying some of the current facilities we lease. We’re kind of evaluating everything right now.”
Email Kirsten Johnson at kjohnson@hawaiitribune-herald.com.