**Urban Honolulu’s Ala Moana Transit-Oriented Development Zone Sees Slowdown in Condo Tower Construction**

What had been one of urban Honolulu’s hottest spots for condominium tower construction in recent years—the Ala Moana transit-oriented development (TOD) zone—has cooled significantly. For the first time in about a decade, construction cranes are no longer a fixture in the area, following the September opening of a two-tower complex called The Park on Keeaumoku.

Though one developer remains optimistic about the region and plans to begin construction on a new tower next year with additional projects to follow, at least six high-rise developments—most of which received city approvals in recent years—have stalled. By comparison, condo tower development in adjacent Kakaako continues actively with several ongoing projects.

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**Stalled Development Highlights**

Dennis Lowery, who operates the Hula Dog Hawaiian Style Hot Dogs lunch wagon on Kapiolani Boulevard, has witnessed the stagnation firsthand. His stand is located across from a defaced construction barrier enclosing a planned $650 million residential and hotel condo tower called Mana‘olana Place. Despite initial construction announcements in late 2022, Lowery describes the site as “just been a wall,” with no visible progress made.

Initially decorated with a mural by local artist Mark “Devour” Visay, the construction barrier—which surrounds 1.2 acres at Kapiolani and Atkinson Drive near the Hawai‘i Convention Center—is now largely covered in graffiti.

According to Salem Partners, the California-based developer behind Mana‘olana Place, the project will be “moving forward” early next year.

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**The Rise of Ala Moana’s TOD Zone**

About a decade ago, developer interest surged in this area due to new city zoning rules allowing extra tower height and density within a half-mile radius of the then-planned Ala Moana Center rail station—a terminus station expected to be the busiest among 21 city rail stops. This spurred numerous projects along the Kapiolani corridor between Piikoi Street and Kalakaua Avenue.

Steve Sombrero, president of Cushman & Wakefield ChaneyBrooks, described the area in 2018 as having “more projects… than anywhere else on Oahu, including Kakaako.” He called it “an exciting time” for the local real estate market.

Notable developments included the opening of the 485-unit Kapiolani Residence tower by Korea-based SamKoo Development in 2018, and The Central Ala Moana, a 512-unit tower by the same developer that opened in 2021. Azure Ala Moana, a 330-unit tower developed by ProsPac Holdings Group LLC, also opened in 2021 and nearly sold out quickly, with units priced from $550,000 to $2.2 million. Azure uniquely included 78 moderate-priced rental apartments.

Other completed projects included Sky Ala Moana and The Park on Keeaumoku, marking a wave of glass-sided towers that transformed the neighborhood.

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**Challenges and Market Headwinds**

Despite early momentum, several approved projects have yet to break ground. Housing market analyst Ricky Cassiday attributes the delays to several key factors:

– High mortgage interest rates
– Rising construction costs
– Strong competition from established Kakaako developers
– A slow rebound in tourists from Japan after the COVID-19 related Hawaii tourism shutdown in 2020

Additionally, the city indefinitely suspended construction of the Ala Moana rail station owing to budget constraints, though Cassiday believes this was not a major factor affecting stalled developments. A planned rail station in Kakaako was also cut.

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**Financial and Legal Issues Hampering Progress**

Financial difficulties have also played a role in delays. Two stalled projects—Hawaii Ocean Plaza and Hawaii City Plaza—became entangled in lawsuits from foreign investors alleging misuse of funds by the California developer led by Johnson Fang. Construction began on Hawaii City Plaza in early 2019 near Walmart and Sam’s Club but quickly halted with minimal progress.

Another approved but unrealized project is Ala Moana Plaza, a 40-story, 550-unit rental tower near Ala Moana Center, owned by Brookfield Properties. No updates have been provided regarding this development.

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**Additional Projects in Limbo**

Salem Partners, besides Mana‘olana Place, also holds approvals for a 444-unit condo-hotel tower at 1500 Kapiolani Blvd. This project, which includes 78 rental units for seniors atop an adjacent former Walgreens parking garage (now a car dealership), remains unbuilt. Salem Partners President William Witte says construction will begin later this year.

Next door, a project led by Hawaiian tech entrepreneurs Fred and Annie Chan—who previously developed the twin-tower Moana Pacific condos—also stalled. A 631-unit residential tower failed to secure city approval after required revisions, including affordable housing changes and tower repositioning. KCR Development, representing the Chans, allowed the application to expire, citing high interest rates and uncertainty over construction costs impacted by federal tariffs on foreign materials.

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**A Developer’s Bullish Outlook**

Amid these challenges, JL Capital is actively moving forward. The firm developed Sky Ala Moana—two towers with mixed residential and hotel units—and is now selling units in Muse Honolulu, a new tower on Kapiolani next to the former Heald College site where Salem Partners’ project is stalled.

Prices for Muse units range from $709,000 for studios to $5.9 million for penthouses, some of which have already sold. Sales for resident owner-occupants exclusively began in July for a 30-day initial period. JL Vice President Mark Berkowitz reports improved buyer interest over the past two months.

To secure financing, JL Capital aims to sell at least 65% of Muse’s 315 units, a target anticipated to be met next year.

In addition, JL is converting a nearby office building into 64 rental apartments and plans to add 37 more rental units on Kalakaua Avenue to fulfill the city’s affordable housing requirements.

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**Current Market Snapshot and Future Prospects**

Oahu’s housing market is now somewhat lukewarm compared to a few years ago when projects like Azure Ala Moana nearly sold out. The Park on Keeaumoku, opened in September after launching sales in 2021, still has approximately 150 unsold units out of 972, priced from $349,147 to $1.6 million.

Cassiday notes that demand from Asian buyers in Honolulu has softened but remains stronger among local residents and mainland buyers. He acknowledges that Kakaako remains more attractive for developers due to better ocean proximity and established builders, but maintains the Ala Moana TOD area holds significant potential.

“It’s got a future,” Cassiday said.

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**JL Capital’s Long-Term Vision**

Earlier this month, JL Capital announced a $36 million purchase of 1.3 acres along Kapiolani Boulevard, including part of Sheridan Street currently occupied by a Runners Route store. This acquisition is earmarked for future tower development.

Tim Lee, JL CEO, said in a statement:
*“This acquisition reflects our long-term vision for the Kapiolani corridor as a vibrant, high-density neighborhood within the Ala Moana neighborhood. With this site, we’re excited to continue shaping and improving the existing corridor with a thoughtfully planned and connected project that will elevate the experience of living in urban Honolulu.”*

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**Conclusion**

While challenges such as financing, construction costs, and market demand have slowed new condo towers in the Ala Moana TOD zone, developers like JL Capital remain hopeful. With evolving market dynamics and strategic investments, the area looks poised to regain momentum as a dynamic urban neighborhood in Honolulu’s evolving skyline.
https://www.staradvertiser.com/2025/10/26/hawaii-news/development-in-ala-moana-kapiolani-corridor-stalls/