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Editor’s Note: This is the first in a three-part series on Japanese real estate investor Genshiro Kawamoto and the controversy he’s generating along Kahala Avenue.
There are rats in Kahala.
In yard after yard along Kahala Avenue, that spectacular Pacific-flanked stretch of road, rusted twists of debris and abundant thickets of overgrowth are theirs for the nesting.
It may be one of the most coveted ZIP codes in Hawaii, but many of the houses there are abandoned. The man who owns them is rarely seen in the neighborhood.
Why Japanese billionaire Genshiro Kawamoto has left this kind of mark on Oahu is as mysterious as the man himself. Asking the famously reclusive Kawamoto is a challenge. Despite repeated attempts through multiple channels, Civil Beat couldn’t reach him for this article.
According to a private Hawaii property database for realtors, Kawamoto owns at least 30 properties on Oahu — 27 of them on Kahala Avenue. That includes only the properties that are listed in his name.
Cedric Choi, vice president of Choi International, the luxury property firm that handles many of Kawamoto’s deals, says there have been other investors who have had an impact in Hawaii real estate. But Kawamoto is “definitely the biggest” buyer the islands have seen in decades, Choi says.
“I don’t think that he has affected the overall market except in his recent purchases in Kahala where he’s actually raised values,” Choi said. “In Hawaii Kai, for example, I think he purchased a lot of property and maybe at the time it raised values there, but then over time, the market forces the prices back.”
Another Oahu realtor, Michael Bates of i Properties Hawaii, says Kawamoto’s buying habits make sense from an investment standpoint.
“Kawamoto’s investments are not surprising, he has picked popular neighborhoods — Kahala, Hawaii Kai, Kailua — and areas that have potential for growth — Kahalu’u and Kula,” Bates said in an email. “His investments are unusual in that he has a lot more money to throw around than most investors. He’s probably held more properties than any other individual investor in recent years in Hawaii.”
Kawamoto’s 25-year legacy in Hawaii may make sense to real estate experts. But it’s been baffling to others, especially his neighbors. And lately, it’s become altogether surreal.
On a recent April morning, Kahala Avenue was humming with energy. Joggers bounced along the smooth asphalt, and cyclists zipped by in either direction. None of them stopped to look at the spot where a house had just been demolished.
About a month before, the structure at 4620 Kahala Avenue was still standing. A year before that, it didn’t even belong to Kawamoto. City property tax records show he bought the property on July 29, 2011, for $4.2 million — more than twice as much as when it sold the last time in 1995. He bought the house next door last September. He paid $3.1 million for that one.
Kawamoto, whose 80th birthday is this year, owns more than two dozen properties over a 1.5-mile stretch along Kahala Avenue, but this spot is an epicenter of sorts. Public records confirm which properties are his, but usually you can tell just by seeing them. Swimming pools filled in with rocks and dirt. Cracked tennis courts. Crumbled concrete and other rubble. Graffiti.
If you’re lucky, you may even see the man himself. In the past year he’s been spotted puttering around doing something that resembles gardening.
Usually, the only human forms on his properties are the statues.
You’ll see most of them across the street from the house that was recently torn down. They appear mass produced, and wouldn’t look out of place in a cemetery. A staffer at the Honolulu Museum of Art said she and her colleagues can’t tell where they came from. They’re dotted across the yards of his properties, some still in crates. The Greco-Roman style figures glow white under the Pacific sun, and dozens of snarling lions stand frozen in mid-roar.
But then there’s something even more unusual: A house that is not his. One house that Kawamoto hasn’t been able to buy.
From the inside, you’d never know that Georg and Rosie Rafael’s home is in such a bizarre setting. Just past the great solid gate that secures the property is a sanctuary of sorts. There is no front door. Much of the tall-ceilinged house is open to trade winds that carry the mid-morning heat past their infinity pool and out to the ocean that laps up to their backyard.
“It’s our dream house,” Georg Rafael says. “Our little Frank Lloyd Wright.”
Georg and Rosie first moved to Oahu 40 years ago. They’re both German-born but they traveled the world before settling on Hawaii. Today they split their time between Kahala and Monte Carlo. It was decades ago in Chicago — Georg says it with an exaggerated short A, like apple, the way a Chicagoan would — that he developed his “little dream” of building big hotels.
The first hotel he built in Waikiki was the Hawaiian Regent (now the Marriott). He’s had a hand in the development, acquisition or reconstruction of hotels like The Regent in Washington and The Beverly Wilshire in Los Angeles. He was responsible for building the Halekulani, which he says is where Kawamoto stays when he’s in Hawaii. Choi won’t talk about where Kawamoto stays, saying he wanted to respect his privacy.
Relations between the Rafaels and Kawamoto have been contentious for years. After long living in a gated Diamond Head neighborhood, Georg and Rosie bought the Kahala lot for $3.5 million in 1999, demolished what was there and built the house they now live in. Georg fondly recalls dinner parties with neighbor Cecily Johnston, who was known to have had guests like Ronald Reagan and Jackie Kennedy Onassis, according to local reports. When she died in 2008, Georg says Kawamoto made her son an offer he couldn’t refuse.
“Cecily Johnston was from an old haole family,” Georg says. “The Johnstons were wonderful. We had known her for a long, long time. We played tennis on her court. And they’re gone. I understand that the Johnston family is a big family — and then this guy offered on this old house, this little wooden house, he offered $24 million. They couldn’t believe it. They had to take it.”
Stanton Johnston, Cecily’s son, did not respond to an interview request, but a commercial realty database shows Kawamoto in 2010 paid $22 million for the property, nearly seven times more than the total assessed value of $3.3 million this year.
Over the years, Georg and Rosie say they have watched many their neighbors go that way. They’re the last hold outs, the only ones who refused to sell. They’ve been saying “no” for more than 10 years. Lately, Kawamoto has stopped asking. The Rafaels say their dealings with him have always gone through a real estate agent like Choi.
“You cannot talk to him,” Georg said of Kawamoto. “He runs away. The minute he sees me, he runs away. I have tried to make an appointment. It was set up through one of his legal things but, of course, no show. He had to urgently leave for Japan.”
Choi says the only interviews Kawamoto grants are “with people who have chased him down.”
Choi says he knows Kawamoto, and describes him as a “kind of fun guy,” someone who is perhaps misunderstood. But he confirms the Rafaels’ characterization of how he acquires so many houses in premium locations.
“He’s been known to pay market prices plus, otherwise people wouldn’t sell to him,” Choi told Civil Beat. “I think that people, when they’re given the opportunity to sell for more than the market price, they generally do sell. He’s offering them in some cases deals that they can’t refuse.”
The Rafaels are an exception. They say Kawamoto tried repeatedly to convince them to sell, even as they turned him down again and again.
“He came back, threatening, saying ‘you have to,'” Rafael said. “And then he started harassing us. We are not out for money. We are not out for speculation. This is our last house that we are going to have in our lives, and we want to enjoy it.”