Chapter 14
GERUD BROUGHT THE plans for the shopping center expansion when he visited his father. He unrolled them over the sunny table in the older man’s yard. Gerud watched his father’s gnarled hands shake as his fingers smoothed over the drawings, stopping to check a legend, and angling his head down to read some of the fine print descriptions.
“So, Gerud, from the looks of this, you are only about forty percent built out. Any reason for this?”
“Well, that’s the way we bought it.”
“So you own this yourself?”
“Actually no, my fath—”
“Just stop with that and say it. Next time you do that I’m going to be angry with you.”
“My father and I own it together. But my brother is in charge of his estate, but I’m going to see if he will let me take it over, since it is technically upside down.”
Peterson frowned and looked up at his son. “Why on earth would you do that?”
“Well,” Gerud shrugged and talked to the hedge next to them as if it was an audience of investors, “To finish out our vision for the place. To show that it can be done.”
“So you have an alligator, and now you want to make babies with her?”
Gerud giggled at the suggestion, which was damn funny.
“It’s not funny, Gerud. If you continue to do business this way, you’ll be broke inside a year. I’m deadly serious.”
“Rob—”
“There you go!”
“Thank you. I think this is an alligator because it is too small and doesn’t draw the traffic if it was built out. There are a number of stores that can’t go in here because there is not enough parking, and the retail space is way too small for them. We’ve been contacted by retailers who wanted to know if we had expansion plans.”
Peterson scanned the drawings and then put his fingers to his lips. “So the parking is here, is that right?”
“Yes, at the present time. But look at that space if it was opened up. Not only would you have a huge lot in front of a big box store, you’d add great accessible parking to the smaller boutique shops by doing so. It’s a win for everyone.”
“At a pretty penny.”
“Well, parking lots are cheap. The storefronts? That’s where the expense is.”
“So you need to attract a good anchor tenant, is that what you’re saying?”
“Exactly.”
Peterson sat back in his wheelchair and took another sip of his milkshake. “What are the features and benefits to an anchor tenant?”
“The obvious one. The golf course.”
“And why is that?”
“Because on any good non-rainy day, and even some rainy ones, they get nearly twelve hundred people on or around this area, not counting families or others who are not golfing.”
“But this is a golfing resort. Why do you think the golf course is the net draw? Look at the surrounding home sites?” His hand swept over the paper. “And here’s a big problem for an anchor tenant.” He placed his forefinger on the end of a cul-de-sac abutting the proposed parking lot. “There is no direct access to the home sites. Only access is either off the highway, here, or from the golf course parking lot, here.”
Gerud looked at the map again and couldn’t believe what Peterson had pointed out to him.
“Tell me, Gerud, would you battle the single lane nearly bumper to bumper traffic that I know exists there during heavy commute hours, and especially on weekends, to go from your driveway, to the highway and then turn back to the center? If I was going to do that, I might go all the way into the next town where there are three big shopping centers.”
“How did you know that?” Gerud asked.
“Because I own one.”
He was dumbfounded. “Which one?”
“Doesn’t matter. Any of them are fine. And we’re all connected so we draw traffic for each other. We try to make it easy for people to get in and hard for them to get out. They’ll spend a day there, or at least do something while they’re waiting for the traffic to thin out.”
Gerud scanned the map again.
“That, right there,” he said, again pointing to the cul-de-sac, “is your alligator.”
“So how do I get them to open it up?”
Peterson shrugged. “You give them something they want. What does the golf course and the homeowners association want?”
Gerud didn’t have an answer for him.
“Have you ever gone over there and stayed at one of those vacation homes?”
“No. I’ve visited, and I’ve played the course several times. My dad and I have together.”
“Do they have a post office?”
“No, they don’t.”
“And if you were going to attend a meeting, a small concert there, or a lecture, where would you go?”
“Well, there are three beautiful hotels here. Tons of convention space too, meeting rooms.”
“Free?”
“Um, I would guess not.”
“Exactly. And they go into Kapulua for their mail, don’t they?”
“I believe so.”
“In that ugly portable building that looks like an old school classroom.”
“Yes.”
“And they have a one year waiting list to get a post office box there.”
“I didn’t know that.”
“Because the homeowners association doesn’t allow mailboxes. What a smart idea that was.”
“Wow. You really know your stuff, Rob.”
“Gerud. You don’t make money by accident. You have to plan your attack. A big new post office and a meeting room free for members to use would draw them to your center in droves, if you had good retail support. You have two ice cream shops, some little local retailers, and a good deli. I’ve been in it. He was a good addition. But for a sit-down meal, you have to go pay a hundred bucks at one of the resorts or the links restaurant. What if you had a family with children who can’t afford that? They can’t all eat ice cream every day.”
“You’re quite right.”
“Sir,” Alex interrupted. “You can.”
Peterson threw back his head and laughed. “That’s right,” he said after he composed himself. “I’m special.”
BY THE TIME they’d finished talking and Gerud had rolled up the plans, his father helped him make a list of things he could do to get his access to the housing development, even creating a plan for three places residents could enter the shopping center so that the burden didn’t fall on one particular street. He had a list of items he was given as homework, things to research.
“So, Gerud, all this is a no go if you can’t negotiate with your brother.”
“Excuse me?”
“Well, actually, your first job is to negotiate with the lender on this property. Bank of Hawaii, is it?”
“Yes.”
“You’re going to have to tell them you won’t be making payments for a year while you develop this. And tell them it might be two years.”
“Wait a minute. Why would they do that?”
Peterson grinned. “Do you think you could sell this thing and get your money out?”
“Hell no. I’ve told them that when they threaten to take it all away.”
“My point exactly. They are prodding you with something, the threat of doing something they have no intention of doing. Your father might have had assets they could go after. But he’s gone now. And you don’t. But if they think you have a backer, they’ll give you time before they own this alligator for themselves, which will not look very nice on their balance sheet.”
“A backer?”
“Me.”
“You would do that, sir?”
“I told you I’d help you, but I intend to make money on it. This isn’t a gift. It’s a loan.”
“Okay.”
“I can see you have questions. Let me answer one of them. Will I be around to get my return? The answer to that is yes. Because if I don’t, then I will haunt you all the days in the rest of your life!”