King's Village Shopping Center, a retail complex in Waikiki designed to resemble Honolulu around 1900, may be redeveloped into a luxury condominium hotel.
A local development partnership that bought the center last year announced its redevelopment idea Wednesday, saying that planning is in a preliminary phase and that more details will be made public as they are finalized.
Zoning on the property allows buildings up to 240 feet.
Construction is expected to begin at the end of 2016, according to the partnership between BlackSand Capital LLC, Kobayashi Group and The MacNaughton Group.
King's Village features about 35 shops and restaurants behind the Hyatt Regency Waikiki on the corner of Kaiulani and Koa avenues.
The late Hawaii developer Chris Hemmeter developed the center originally called King's Alley in 1972 along with the twin Hyatt hotel towers.
Hemmeter gave the resort shops a theme reflecting how a section of Honolulu looked around the end of the 19th century, and established a daily performance by a drill team dressed in uniforms replicating those worn by the Hawaiian Royal Palace Guard for King Kalakaua in 1875.
The center says the performance, which is held daily at 6:15 p.m. and represents the changing of the king's guard, is the longest running daily event in Waikiki.
The center also features handprints of celebrities mainly from Hawaii in what is dubbed Waikiki's version of Hollywood's "Walk of Fame."
Frank Sulfaro, who helps spray-paint performance artist Wayne Gabaylo produce art shows twice a night, five nights a week, at King's Village, was surprised by the announcement.
"It's a historic site and I'd hate to see it go away," he said.
Gabaylo began performing at the center in 2002, and opened a gallery there in 2003, according to Sulfaro, who said he was nervous when BlackSand bought the center last year. Sulfaro said he saw that the new owner was investing money in improvements and hoped that meant better things to come. "We put our heart into this place," he said.
A BlackSand subsidiary, BSC KVSC LLC, bought the King's Village property in October 2012 for $41.3 million, according to property records. The firm also bought two smaller neighboring parcels that include low-rise residential and commercial buildings for a combined $8 million, bringing its land ownership to a little more than an acre.
The developer said it has consulted with the Oahu Island Burial Council and plans to start survey work searching for archaeological artifacts below the ground later this month.
BlackSand, which was established in 2010 by BJ Kobayashi and Ian MacNaughton, said it has raised about $200 million to invest in Hawaii real estate projects.
The company partnered with Kobayashi Group, MacNaughton Group and two other partners to buy the OHANA Waikiki West Hotel last month with plans to turn the 659-room budget hotel on Kuhio Avenue into an upscale property.
BlackSand also bought a piece of Pearlridge Center including 9 acres of mostly parking and a former anchor space once occupied by J.C. Penney in 2011.