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County eyes Hilo mall space: 2 offices would occupy former Safeway store, but use of retail spot a concern

Updated: 
October 6, 2017 - 10:08pm

HILO — 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 building only requires one affirmative vote by the full County Council to be passed.

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 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.”

Email Kirsten Johnson at kjohnson@hawaiitribune-herald.com.

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