Jeff Arce and his partners run businesses ranging from large commercial real estate developments to retail operations Starbucks, Jamba Juice and PF Chang’s. Working with one of Hawaii’s most dynamic and successful entrepreneurs, Jeff got his entrepreneurial start with Blockbuster Video. Some of the better Known MacNaughton Group projects include Costco, Waikele Center, Maui Marketplace, Hokua and Capital Place and some of the retail tenants that the MacNaughton Group has brought to the islands include Costco, Kmart, Borders Books & Music, Pier One, The Sports Authority and Office Max.
Jeff shares with us what it’s like to come from the mainland and how to fit in with Hawaii locals. His insight into business, family and community are priceless.
Some questions asked:
Welcome Jeff, can you tell us about the MacNaughton Group and what they do?
Does The MacNaughton Group have a stated business strategy or a “mission statement”?
What is your role in the company?
You are originally from California. How did you end up in Hawaii?
Was the transition from California to Hawaii difficult?
What was the biggest surprise about Hawaii?
Could you share with us a story about your transition and how it was being a “haole.”
What made you decide to leave the comforts of a large accounting firm, and join a start up business like Blockbuster Video?
What was the transition like moving from Arthur Andersen to Blockbuster?
When did you start working with Duncan?
What were some of your first thoughts when you met Duncan?
What has he been like to work with?
Accountants are not generally thought of being risk takers or entrepreneurs. Do you now consider yourself an entrepreneur?
How do you define an entrepreneur and what do you think makes one successful?
What are your thoughts about running a successful business and supporting the community?
We keep hearing about the GIFT Foundation on this program. Tell us a bit more about it and how you fit in?
What have been some of the early struggles for the GIFT Foundation?
What are some of the successes?
What else do you do to support the community?
How about your family life? I understand you have 3 young girls. How do you manage to balance your business life with your home life?
What are some of the fun projects you are working on now?
How did you choose PF Chang’s?
How are the projects/partnerships arranged between the different companies?
What do you look for when you consider a project or new business?
How do you manage and mitigate the risk of a project?
What’s your opinion on Hawaii real estate? Are we in a bubble?
What makes an entrepreneur and what makes them successful?
What are the biggest and most common mistakes you see entrepreneurs or business owners make when starting a new venture?
Any last advice for business people?
What are the biggest challenges business or personal?
BIO:
Jeff is a partner in The MacNaughton Group, a Hawaii-based diversified real estate oriented development company. The MacNaughton Group has developed a number of retail shopping centers in the Islands, including Maui Marketplace, a 300,000 square foot retail center in Kahului, Maui; Stadium Marketplace, a 200,000 square foot retail center adjacent Aloha Stadium; and Kukui Marketplace, a 160,000 square foot retail center in Lihue, Kauai. The MacNaughton Group also co-developed the Waikele Center and Waikele Factory Outlets with Dick Gushman. The MacNaughton Group is currently developing three projects: a small 8,500 square foot retail center in Kailua Kona called Henry Street Shops; a 22,000 square foot retail and office center in Kapolei called Kapolei Parkway Shops; and the redevelopment and expansion of an existing retail center called Moanalua Shopping Center, which will result in approximately 55,000 square feet of new and improved retail space and the construction of a 55,000 square foot, two-story, Navy administrative office building.
On a joint basis with The Kobayashi Group, The MacNaughton Group is currently co-developing Hokua at 1288 Ala Moana, a 400-foot luxury high-rise residential condominium in the Victoria Ward area; and they have recently announced plans to jointly develop a regional “lifestyle” open-air mall in Kapolei and a 350-foot, 394-unit residential condominium in Honolulu called Capitol Place.
In addition to its real estate activities, The MacNaughton Group is a founding investor in a number of local operating companies, including Coffee Partners Hawaii, a joint venture partnership formed in 1996 with Starbucks Coffee Company to develop and operate Starbucks retail locations in Hawaii and Puerto Rico; and Juice Partners Hawaii, a joint venture partnership formed in 1998 to develop and operate Jamba Juice retail locations in Hawaii and Florida. The MacNaugthon Group and Coffee Partners recently announced that they have entered into an agreement to serve as the exclusive operating partner for PF Chang’s in Hawaii.
Prior to joining The MacNaughton Group, Jeff was a senior manager with the international accounting firm of Arthur Andersen & Co. He joined The MacNaughton Group in 1989 as the Vice President of Finance and Chief Financial Officer for Blockbuster Video Hawaii, one of The MacNaughton Group’s holdings at the time.
Jeff received a Bachelor of Science degree in Economics from Claremont McKenna College. He was born and raised in Southern California, but his roots lie in Hawaii where his grandfather was born and raised. Jeff regularly serves on a number of community service oriented volunteer boards and committees. He is married and has three daughters, Jamie (age 9), Caitlyn (age 4), and Brianna (age 1).
THE MacNAUGHTON GROUP SUMMARY
THE MacNAUGHTON GROUP
Summary
The MacNaughton Group, with its principal Duncan MacNaughton and partners Jeff Arce and Eric Tema, is a diversified group of companies that includes real estate development, leasing, retail operations and various operating companies.
Real Estate Activities
The MacNaughton Group has been involved as principal and/or owner in the development of a number of different real estate projects, including the Ainamalu residential subdivision on the slopes of Diamond Head; Kaanapali Royal resort condominiums on Maui; various Kmart projects on Oahu, Maui, Kauai and in Kona; Costco Center in the Bougainville Industrial Center; the Pali Momi Medical Center in Pearlridge; Maui Marketplace; and Waikele Center.
The MacNaughton Group has been responsible for the successful introduction of several mainland companies to the Hawaiian Islands, including Costco, Sports Authority, Eagle Hardware, OfficeMax, and Kmart. As the exclusive developer for Kmart Corporation’s stores in Hawaii, The MacNaughton Group has developed such projects as the Kukui Marketplace, Stadium Marketplace, Kmart Maui and Makalapua Center. Additionally, The MacNaughton Group provides leasing and real estate consulting services to third parties.
In August 2005, The MacNaughton Group completed the Henry Street Shops, an 8,500 square foot retail center in Kailua Kona. The MacNaughton Group is currently developing two projects: a 22,000 square foot, two-story retail and office center in Kapolei called Kapolei Parkway Shops; and the redevelopment and expansion of an existing retail center called Moanalua Shopping Center, which will result in approximately 55,000 square feet of new and improved retail space and the construction of a 55,000 square foot, two-story, Navy administrative office building.
On a joint basis with The Kobayashi Group, The MacNaughton Group co-developed Hokua at 1288 Ala Moana, a 400-foot, 248-unit, luxury high-rise residential condominium in the Victoria Ward area, which opened in January 2006. They currently are co-developing a 350-foot, 394-unit residential condominium in Honolulu called Capitol Place, and regional “lifestyle” open-air malls in Kapolei, Kona and Kihei.
The MacNaughton Group has developed over 2 million square feet of retail in Hawaii in the past decade.
Other Business Activities
The MacNaughton Group is also involved with various non-real estate business activities. In 1989, The MacNaughton Group invested in Pacific Video Entertainment Corp., the local Blockbuster Video franchise. Pacific Video sold its 18 Blockbuster Video stores to Viacom in March 1996.
In 1993, The MacNaughton Group invested in FileMinders, a records retention and storage company. FileMinders was sold in October 2001 and is still the largest comprehensive commercial records storage and service center in Hawaii.
In 1996, The MacNaughton Group formed a joint venture partnership with Starbucks Coffee Company to develop and operate Starbucks retail locations in Hawaii. The partnership opened its first store on Oahu in December 1996. The MacNaughton Group also formed a joint venture to develop and own Starbucks retail locations in Puerto Rico and opened its first store there in September 2002. On January 23, 2006, The MacNaughton Group sold its interest in the Hawaii and Puerto Rico stores (including 52 Hawaii stores and 13 Puerto Rico stores) to Starbucks Coffee Company.
In 1999, The MacNaughton Group formed a joint venture partnership with Jamba Juice Company to develop and operate Jamba Juice retail locations in Hawaii. The partnership opened its first store on Oahu in June 1999 and plans to develop a number of stores throughout the Hawaiian Islands. As of June 7, 2005, the partnership has 26 stores open and operating in Hawaii. Additionally, in 2000, The MacNaughton Group formed a joint venture with Jamba Juice Company to develop and operate Jamba Juice retail locations in Florida. The partnership has 12 stores open and operating in Florida.
In 2005, The MacNaugthon Group entered into a joint venture agreement to open and operate PF Chang’s Asian Bistros in Hawaii. The partnership is scheduled to open a 7,500 s.f. restaurant at Hokua in August 2006 and a restaurant at the Royal Hawaiian Shopping Center in Waikiki in late 2008.
Past Real Estate Projects
1970 1010 Wilder
An 18-story, 42-unit luxury condominium along the slopes of Punchbowl, Honolulu. This was the first condominium high-rise apartment building in Honolulu designed to accommodate “empty nesters” with large single-family houses. Today, it is one of Honolulu’s most sought condominiums.
1973 Lilipuna Hillside
A 545-unit condominium situated in Kaneohe, Oahu.
1974 Woodwinds Condominium
A six-story, 150-unit residential condominium in Wahiawa, Oahu.
1974 Pali Ke Kua
A two-story, 99-unit residential resort condominium located at Princeville, Kauai.
1975 Ainamalu
An 11-unit residential subdivision on the slopes of Diamond Head, Honolulu.
1980 Kaanapali Royal
A 105-unit resort condominium in Kaanapali, Maui.
1980 Pali Momi Medical Center
A 250,000 s.f. medical center in Pearlridge, Honolulu. Mr. MacNaughton conceived and successfully permitted Hawaii’s first for-profit acute care hospital/medical office building.
1992-94 Waikele Center
A 725,000 s.f. value-oriented commercial center, consisting of a 518,000 s.f. power center (Phase I and II) and a 207,000 s.f. factory outlet center (Phase III), located adjacent Waipahu, Oahu. Sold in 1998.
1994 Kmart Kona
A 125,000 s.f. Kmart located in Kona, Hawaii. Sold in 1995.
1996-99 Maui Marketplace
A 300,000 s.f. value retail center, including approximately 270,000 s.f. of value-oriented anchor tenants, plus 30,000 s.f. of manufacturer’s outlets, a food court, restaurants, and Maui-based merchants. Sold in 2000.
1998-99 Kailua Village Shops
A 10,000 s.f. community-oriented project in Kailua developed on a fee basis on behalf of the owners.
Real Estate Projects Owned or in Process
1989 Costco Center
A 200,000 s.f. shopping center located in the Salt Lake area, Honolulu, Oahu.
1992-93 Kmart Kahului
A 107,000 s.f. retail store located in Kahului, Maui.
1993-94 Stadium Marketplace
A 220,000 s.f. value-oriented neighborhood center, anchored by a 125,000 s.f. Kmart, located adjacent Aloha Stadium, Oahu.
1994 Kukui Marketplace
A 142,000 s.f. center anchored by a 122,000 s.f. Kmart, located in Lihue, Kauai.
2000 Kapahulu Center
Redevelopment of the former Keo’s restaurant site on a fee basis on behalf of the owner.
2000 Kailua Village Foodland
Redevelopment of the Foodland-anchored center at Kailua Village on a fee basis on behalf of the owner.
2001-03 Kukui Grove Center
Assisted in redesigning the 310,000 s.f. Liberty House/Sears/Longs-anchored center in Lihue, Kauai, on a fee basis for its owner, Grove Farm.
2005 Hokua at 1288 Ala Moana (opened January 2006)
Co-development of a 248-unit, luxury, high-rise condominium in Honolulu, Hawaii, scheduled for completion in 2005.
2005 Henry Street Shops (opened August 2005)
An 8,500 s.f. retail center located in the heart of Kailua-Kona.
2006 Moanalua Shopping Center (scheduled to re-open April 2006)
Redevelopment and expansion of an existing retail center, which will result in approximately 55,000 s.f. of new and improved retail space and the construction of a 55,000 s.f., two-story, Navy administrative office building.
2006 Kapolei Parkway Shops (scheduled to open June 2006)
A 22,000 s.f. retail and office center in Kapolei scheduled for completion in 2006.
2006 Capitol Place (scheduled to open May 2008)
Co-development of a 350-foot, 394-unit residential condominium in downtown Honolulu.
2007 Kapolei Commons (scheduled to open late 2008)
Co-development of a regional “lifestyle” open-air mall in Kapolei.
2007 Kona Commons (scheduled to open late 2008)
Co-development of a regional “lifestyle” open-air mall in Kona.
2007 Kihei Commons (scheduled to open late 2008)
Co-development of a regional “lifestyle” open-air mall in Kihei.
Links:
The MacNaughton Group
The Gift Foundation of Hawaii
My Odeo Channel (odeo/37b30198ca6ef855)
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