A new master planned community. Kapolei’s first new car dealership. Hawaii Pacific Health. And the Kapolei Chamber of Commerce. These were guests for our virtual West Oahu Means Business panel discussion — hopefully our last virtual version; the panel has typically been one of our largest events with a couple hundred guests in the audience eager to hear about economic growth, development and opportunities in West Oahu.
All those good things are still happening in the region, Pacific Business News learned from this year’s panelists. But so have the outbreak of the Covid-19 pandemic, two year’s worth of policies formulated to combat it, and the related labor shortage and supply chain issues. Here’s what West Side leaders had to say about progress and challenges in their region.
Our panelists
Christopher Ryan Gross, vice president, sales and marketing, principal broker, D.R. Horton Hawaii
Kiran Polk, executive director, Kapolei Chamber of Commerce
Dennis Short, president, BMW of Honolulu, MINI of Hawaii
David Underriner, executive vice president, Oahu operations, Hawaii Pacific Health
Moderator: A. Kam Napier, editor in chief, Pacific Business News
New neighborhoods
DR Horton’s Hoopili master planned community continued to boom in West Oahu and hit a milestone in 2020. “We had our 1,000th closing and 1,000th set of homeowners move in,” said Christopher Ryan Gross, vice president, sales and marketing, principal broker of D.R. Horton Hawaii. “It was a couple who were first-time homebuyers with a little dog and a daughter, and it’s a beautiful story, as were the other 999 before them.”
There are a lot more Hoopili units to come, too. When the development is fully built out, it will have between 11,000 and 12,000 residences. So far, 1,800 have been built, including rentals and affordable rentals.
“This particular year has been really large for us from an amenity standpoint and from an overall community standpoint,” Gross said. “We opened our Festival Street, which is a private road or private section of Hoopili. It will remain private, and can be shut down for private events or larger community events.”
DR Horton kicked off events on the street with a family festival, partnering with Mele Murals to get community participating in painting a mural of their hopes and dreams for Hoopili’s future. There have been street markets as well, and a Christmas market is planned.
Other amenities rounding out the community so far include a “bark and ride,” a play on “park and ride,” which combines a bark park with transit-oriented development facilities. At build-out, Hoopili will contain five Department of Education schools — three elementary, one middle and one high school with the latter to come online first. Meanwhile, Honouliuli Middle School, though not within Hoopili itself, is in the process of opening near the Kroc Center and providing an option for residents. With all these coming to fruition, as well as the new housing, Gross said the vibrant community they’re aiming for looks like a reality now.
Commercial real estate development is also underway, such as those in partnership with The Queen’s Health Systems and the Hawaiian Humane Society. For the latter, Hoopili donated the land to the nonprofit and plans for the new shelter are in development, including a commercial real estate component built right into its housing.
“We sell what’s called a flex home, which is an AMX2-zoned residence where you can have your business space for certain usages on the first floor and then have your residence on the second and third floor above,” Gross said. “Since early days of Hoopili, we’ve had hair salons, small cafes, spas, things like this.”
A Teapresso recently opened, selling bubble tea, and Domino’s Pizza just closed a deal to open soon. “We’re super excited about the retail component of Hoopili.”
It’s always been important to offer affordable housing in Hoopili, as well as what Gross calls, “attainable housing” that, while not strictly within the government definition of affordable is at least obtainable by market standards. The supply chain issues have added a wrinkle there, with vendors raising prices on materials.
“It [seems] random what we can’t get,” he said. “It could be some obscure thing like the bottom rack for a sink that’s delayed. Appliances have been a challenge; we just have to order them a lot earlier. It sounds ridiculous, but it’s a very real way of doing business. And basically, I think in all facets of our business, we’ve had to constantly be ready to change on a dime.”
Inevitably, the increased costs for DR Horton are showing up in home prices, but the housing market has been so hot that Hoopili homes have remained competitively priced in comparison. “It’s not uncommon for us to have 40-50% of our buyers be first-time homebuyers, which means we’re doing something to provide housing that somewhere else on the island potentially is not. We’re pretty proud of that.”
On the labor side, DR Horton may be one of the few companies on island to feel positive effects through Covid. The construction side was declared essential and could keep working, and the closures and furloughs of the nearby resorts turned out some skilled people that the sales side of the operation acquired. “Hiring has been fantastic,” he said. “We’ve actually grown and brought on fantastic hires.”
New set of wheels
One panelist feeling the supply chain pain was Dennis Short, president, BMW of Honolulu, MINI of Hawaii. The day of our panel discussion was supposed to be the grand opening of MINI of Hawaii in Kapolei, the city’s first new car dealership. However, with construction supplies held up around the world, opening day had been postponed.
“To give you an example, we had some tile that was coming from Italy and it was nowhere to be found. Finally, [we heard], ‘OK, it’s on a ship off the coast of Mexico because they couldn’t get a berth in Los Angeles. A week goes by, I say, ‘Where’s the tile?’ We hear, “Oh, it’s just about in Korea, the ship decided to go there first, then Los Angeles.” Finally, the answer to one of his queries was, “It’s coming today, it just cleared customs,” having suddenly materialized in Los Angeles.
It’s being felt in the products, too. Not that they can’t get enough MINIs to sell, but that some of the options — heated seats, infotainment upgrades — just can’t be obtained.
Parts for repairs are harder to come by. Things that pre-Covid were available by air from Europe in 24 hours are now going on ships and taking seven to 10 days. “I’m on a national council for the after-sales for BMW and everywhere is having that same problem.” Ultimately, he said, when you trace the issue back to the source, it’s not the manufacturer or the shipping company, it’s the container demand, and that there aren’t enough truck drivers. “It’s really a labor issue.”
And another Covid-era challenge that has bedeviled his technicians is that the manufacturers have suspended their normal training schedules — but not the pace at which they keep changing the technology in the vehicles. On the upside, his service records tell him the vehicles are better than ever, having fewer problems and more time elapsing between problems, but when the problem is novel and the technicians haven’t had training on it, it’s a frustration.
Despite all this, the MINI and BMW team are excited about their new home, touring it throughout the construction phase and preparing to move from the temporary dealership on Ala Moana Boulevard.
“There’s a lot of community interest and I’m glad to hear that Hoopili is coming on,” Short said. “The more people we have out here, the better it is for us. [For] our business, demand is up dramatically. I’m very excited [to be] bringing the dealership out to West Oahu, Kapolei in particular, not only for people from the West side, but people from the northern part of the island and central Oahu. When they get to the H-1-H-2 interchange, I think they’ll turn right, particularly to come for service and possibly turn right to come to purchase a new vehicle.”
One reason he’s confident about the appeal is that the dealership, in the works since 2014, is not only the first of its kind for Kapolei, it’s also a trailblazer for BMW North America in that it’s the first MINI dealership in the U.S. to get permission to also service BMWs. “People that own BMW luxury vehicles on the West side of the island will not have to put up with the commute to go in to town and have a service appointment at 7 a.m. and have a two-hour drive going in there.”
How did he pull this off? It started with a conversation over breakfast in Antigua, when he asked the president of BMW North America if he could do this. The answer was a simple, “No.”
“So I asked, ‘Why?’ Short replied.
‘Well, it’s just never been done, Germany will not permit it,’” the retort.
Fortunately, a table-mate from BMW Germany knew of one MINI dealership in Munich that had such an arrangement and with that precedent set, Short was able to convince BMW leadership to go for it on Oahu. Then, when those leaders left their jobs, he had to reconvince their replacements over the years, too, but it all worked out. In terms of local logistics, he’s moving some of the BMW technicians from the Honolulu dealership out to Kapolei, with some additional hiring to beef up the team.
“Whether this one is successful will determine whether others across the nation get the same ability to do it.”
For many of his staff, the new dealership is closer to home. In regards to the labor shortage, Short said retention has been good at his dealerships and turnover low. “I’ve found that it’s much better to take care of your employees than to be replacing them and I attribute that to my middle management, which has made sure that we take care of the staff rather than turning them over. And the other part of is we’ve made sure we’ve had a good training program internally and product training for the staff so that they want to know what they’re doing. They don’t just want to come to work for a paycheck. They want to be involved in the end product and that is developing and providing great service.”
Health and wellness
Staff retention has been a tougher road for Hawaii Pacific Health, said David Underriner, executive vice president, Oahu operations. Hawaii’s health care labor shortage predates Covid, but the stress of the crisis as it was experienced by the workforce worsened the issue.
“It’s across the board and not to be too dramatic, but I’ve been reading articles, talking to colleagues across the country about what’s been called the ‘Great Resignation.’” he said. “What’s happening is you start seeing folks move toward retirement and just say ‘I’m out, I’m burned out, I’m ready.’ And they can do it, they can actually retire. So we’re seeing this pretty significant number of folks who can leave the profession, leave. And because it’s happening across the country, our ability to recruit nurses, or other positions, we’re competing with every state.”
Perhaps counterintuitively, it’s accelerating even as the daily sense of crisis over Covid fades away. Underriner calls this an especially fragile time. As the crisis passes, so does the sense of urgency and emergency that lifts people up to meet the demands of the situation. It’s back to normal, emotionally, but with workloads that remain high because now hospitals are busy as a result of all the delayed care associated with the Covid policy response.
“We were locked down, people were concerned with, ‘I can’t go out,’” Underriner said. “So we saw a lot of diminishment of prevention services, things like mammography and colonoscopy, things that, if you would do them early, would catch things early. It’s getting better, but people are still concerned about, should I go out? Should I get these things? What we’re seeing are those people who didn’t get the mammography or the colonoscopy or do the screenings then — they’re sicker now. You can see that when I look at our admission rates and what kind or types of disease or issues are there. It was not a good thing that happened during Covid, to be honest. Now we’re catching up to that. And now we have got to pick back up on getting people in for prevention services and those screenings and all those things. That’s an important message that we need to get out.”
One thing HPH did do, when it saw people shying away from the hospitals, was go out into the community for vaccines drives. “Twenty-eight thousand vaccinations so far in West Oahu,” he said. “If you think about that number, that’s a lot of folks and we’ve done that just being there, being available. I really appreciate the support of the community around it because we really believe one of the most important things folks can do is get vaccinated. I will tell you, working in the delivery side — and I know this has been a bit politicized — but when people end up getting sick who’ve been vaccinated, they come in, they get treated and go home. Folks that aren’t vaccinated, not so much.”
On the labor front, HPH has been working with public schools, and Kamehameha Schools, offering scholarships and internships for a range of jobs, such as medical and clinical assistants who can take pressure off the system. “It’s a great way to get into health care and it’s a great way to move up from that, to become a nurse or become a respiratory therapist or so on, [so we] create those pathways.” These entry-level positions are vital, he said, “If we don’t have enough medical assistants for Kapolei clinics, all the physicians can do is put patients in a room to wait.”
PBN asked, while there’s a reason the education for doctors and nurses takes so long, is there any way to accelerate the training cycle to get people in the field, faster? Turns out there’s a bottleneck nationwide on the education side.
“There’s something like 88,000 people across the country who want to go into nursing but who couldn’t get into a nursing school,” he said. The industry needs to find a way to turn experienced nurses and radiologists and so on into adjunct faculty to boost the training capacity, he said.
Chamber breaks new ground
Like Kapolei itself, the Kapolei Chamber of Commerce has experienced phenomenal growth since its founding in 2008. It now has nearly 300 members, 32 of them sponsoring members and in the past 18 months, spurred in part by the Covid economy, forming six new committees, with more to come.
“Food sustainability is one that we’ll be covering and educating people on in the next year,” said Kiran Polk, executive director. “Then there’s military and government affairs, which we’re starting in the new year.”
But the flagship committee, chaired by Eliza Talbot of the Resort Group, is the chamber’s economic revitalization task force. That may be a surprise, since Kapolei has been nothing but development, but that development hasn’t been uniform throughout West Oahu and the issues the task force are taking on are not confined to post-Covid recovery.
“We have a line in our new issue of Kapolei Magazine [about the times we’re in] that ‘The world stood still, but Kapolei kept moving,” Polk said. “Early on this year, we sat down and said, we need to look future forward. Through this past year, there were still groundbreakings. There were still grand openings. Things were still happening. With that being said, we recognize that we need to put a spotlight on West Oahu. The longstanding policy by the City & County of Honolulu for years has been to push the growth out to our side and we recognize that and said, ‘OK, then because of that, we need to be prepared to lead on that and on economic revitalization once we get out of this pandemic.’”
The effort kicked off in April with a meeting with Honolulu Mayor Rick Blangiardi and the area’s elected officials to work out six top priorities. The first is inspired by the the number of people displaced from their jobs through Covid and who launched their own business, and intends to foster entrepreneurship in general by creating a co-working space to be called the West Oahu Innovation Center.
“There’s no place for these small-business people who are starting up in their homes to go to have meetings or have that space to work,” she said. The task force is seeking private and public funding for the Innovation Center and partnering with such organizations as the Council of Native Hawaiian Advancement to help spread opportunities more widely through West Oahu. “We hope to have that operational within this next year and the concept of it to get [creation of it] subsidized then have someone like a BoxJelly take it over as an operator.”
Workforce development is the second priority, not only for the obvious top employers in the area, hospitality and health care, but for a range of trades skills such as commercial drivers licenses.
This is an area the chamber had been pioneering pre-pandemic with such things as a career expo. “We took 1,300 freshmen from Campbell and Kapolei high schools and bussed them to the UH West Oahu campus where they get to interview 80 employers. So if you wanted to go into real estate, what kind of jobs are there? What are the jobs in trades? Is there a market? What I’m hearing from our members is that every industry is having labor issues and it’s something that we have to address. We’re hoping to have some virtual job fairs as well as some in-person stuff next year.”
The task force is also urging the city to do something with its vacant lot across from Kapolei Hale. After an initial investment in the area, with county, state and federal offices moving to Kapolei, this particular parcel has passed from administration to administration until it was practically forgotten. “There’s opportunity there for affordable housing and mixed-use development and economic growth, so we’re advocating for that to be utilized.”
Broadband equity is another priority for the task force to help unlock the potential of all of West Oahu. “We have a huge inequity on the West side on the Waianae coast alone. These are 2010 numbers, but I know it hasn’t changed that much — 77% of our households on the Waianae coast are connected. Compare that to East Oahu, where they have 93% connectivity. We want to make sure with the infrastructure funding that’s coming from the federal government gets to our families, our businesses, for our growth on our side.”
Finally, the task force is exploring regenerative tourism models — which could result in supporting the community through cultural exchange, voluntourism and environmental projects — and supporting the UH Academy for Creative Media.
“We feel strongly that we’re poised, in the second urban core, to be the heart of where the film industry will be in Hawaii,” said Polk. “It’s a multi-billion dollar opportunity for our state and we, with the [Waianae High School] Seariders [videography program] on the Waianae coast and our UH West Oahu counterparts with ACM, have some amazing opportunities to have a studio and then also all the ancillary businesses connected to that.”
In the meantime, what is she most excited about for the year ahead, in addition to these big goals?
“I’m really looking forward to the first pau hana networking event that I can host for our members to network in-person,” said Polk. “To get back to some kind of a normalcy, and get back on track. I’m really excited about that!”
