Restaurants, stores go with the flow: Adapt to marketplace changes at The Shops at Mauna Lani

  • Locals and visiting families visit The Shops at Mauna Lani Saturday after Hurricane Lane passes the island. (GEORGE FULLER/SPECIAL TO WEST HAWAII TODAY)

KOHALA COAST — Since Kilauea’s newest lava eruptions began in early May, businesses up and down the Kohala Coast have had to adjust to the island’s decrease in tourism. For tenants at The Shops at Mauna Lani, there have also been changes in the shopping center’s ownership and management over the past year.

Store owners able to adapt haven’t seen major changes. But between June and August, four stores — The Fine Hawaiian Gift Gallery, The Blue Room Brasserie &Bar, Monstera Noodles &Sushi and Studio 55 — closed.

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Tommy Bahama store and restaurant, Foodland Farms and Ruth’s Chris Steak House have been the anchor stores since the 78,209-square–foot shopping center opened in 2006. Other original tenants are Lahaina Galleries, Oasis Lifestyle and Jourabchi apparel store. Kimobean replaced Starbucks there eight years ago.

According to Rick Oliver, a former Clark Realty tenant, The Shops at Mauna Lani was previously owned by Bill Borkan. His family sold the shopping center to Arciterra — a Phoenix, Arizona-based real estate investment and development company — in May 2017.

This is Arciterra’s first property in Hawaii, in addition to nearly 70 others of varying sizes that they own in more than 20 states on the mainland.

More than four years ago, owners of Under the Bodhi Tree — one of the first vegetarian/vegan/raw restaurants on the island — considered all shopping centers on the island’s west side before opening at The Shops at Mauna Lani.

“We felt our demographic was best served here because we wanted to be in an upscale area,” Stephen Rouelle said. “Our business is about 50 percent locals and 50 percent visitors. We’ve had nothing but positive experience with the shopping center’s former and current owners. The new owner has also brought an organized, business-like approach.”

Rouelle said his restaurant experienced almost no change in business from decreased tourism until July, “but this was a single digit decrease, compared to the island’s double-digit numbers.”

Hawaiian Island Creations liked the shopping center so much that they opened HIC Wahine, their second outlet at the same location, in March 2017. Hapuna Realty opened two offices there in less than a year; the first last September and a second one earlier this month. Homes featured on their website range from $450,000 to nearly $19 million each.

“The walk ins are great for our office next door to Tommy Bahama,” the company’s owner Tomoko Matsumoto said. “I’ve been a tenant (with previous businesses) for many years and know the traffic there.”

Henderson Design Studio, Lahaina Galleries and Lavaka Galleries appeal almost exclusively to part-time residents building or renovating homes along the Kohala Coast.

Visitors who previously took day trips to Hilo or Hawaii Volcanoes National Park have stayed closer to home the last few months.

“Shopping centers are seeing an increase (in business) since visitors on the west side are shopping more here instead of going to the east side of the island,” Ross Birch said, executive director of the Island of Hawaii Visitors Bureau.

Of the 35 spaces in the shopping center, at least four are currently available.

“We’ve had a lot of interest in the two restaurant spaces and one of the retail ones,” Mitch Green said, who has worked at the shopping center for four and a half years and was recently promoted to property manager. “We’re actively negotiating with several different people about opening restaurants here. The goal for everybody is having them up and running before tourist season by the end of the year.”

Beginning in October, Mauna Lani Bay Hotel &Bungalows — one of the two hotels in Mauna Lani Resort — will close its doors for 18 months for a $100 million renovation. Auberge Resorts will assume management of the hotel when it’s scheduled to reopen in late 2019, sure to bring a new of flow of affluent guests.

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In the meantime, Green said Arciterra is looking at new ways to market the shopping center when the hotel is closed temporarily.

“If businesses are just trying to make money off of people staying at the hotels, they’re not going to succeed,” he said. “When the volcano erupted it definitely had an effect on everybody’s business, but some quite a bit because they didn’t change and or have any kind of cushion. Ones who adapted are still going strong. The same will be the case when the hotel is closed.”