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December 04, 2007

Mark Fergusson, CEO of Down to Earth – Hawaii’s largest all-natural chain, with two stores on Maui – isn’t one to talk stink about his competitors.

Still, he can’t help but wonder why Whole Foods, the upscale health food chain, is pushing ahead with its first store in the Islands – even though 65 Hawaiian burials have been discovered on the Honolulu site, and archaeologists predict there could be hundreds more.

“It’s a Hawaiian cultural issue, but it’s also common sense,” Fergusson says. “Who wants to go shop in a graveyard?”

It’s a question that may not soon be answered, given the delays already encountered at the Kakaako site where General Growth Properties is developing the $150 million Ward Village Shops project, which includes the state’s first Whole Foods Market, a condominium tower, parking garage and smaller retail stores.

Construction on the Auahi Street project has been halted numerous times as more and more bones are uncovered, and the Native Hawaiian Legal Corp. has filed litigation challenging the state’s decision to allow General Growth to re-inter about half of the remains in three designated burial preserves on the site.

The state advised a redesign for the condo tower to leave some 30 burials in place, while the iwi kupuna – ancestral bones – removed from the Whole Foods area are being stored in an air-conditioned trailer on-site, with plans to re-inter them when the project is completed.

Jan Yokota, vice president of General Growth, says that work is currently proceeding only on the parking garage and Whole Foods building, with the Whole Foods market tentatively set to open in late 2008.

Lee Tokuhara, who is listed on the Whole Foods website as the company’s Hawaii contact, did not respond to a request for comment about either the burials issue or the status of the company’s plans to open additional stores in the Islands. On Maui, Whole Foods will open in the location currently occupied by Star Market in Kahului. Stores are also planned for Kahala Mall and Kailua on Oahu. No projected opening dates were listed for any of the stores, although Kahala Mall tenants already have been evicted to make way for Whole Foods.

Once the bones started turning up, Whole Food’s initial fanfare about entering the Hawaii market stopped abruptly. Some mainland publications have printed Associated Press articles that outline the cultural troubles being encountered by a company that presents itself as socially and environmentally responsible – an asset to the community.

“It’s got to be a public relations nightmare for them, and there’s no positive spin you can put on it,” Fergusson says.
So Whole Foods has remained silent, letting General Growth do the talking. And officials with the development firm have used the same argument cited repeatedly by Hawaii Superferry: the state told us it was OK to go ahead.

In this case, the approving state agency was the Hawaii Community Development Authority, which granted General Growth permits for the project, without first submitting the plans to the State Historic Preservation Division (SHPD) for approval. SHPD oversees the protection of historic sites, including burials, and is required by state law to review all major development proposals.

General Growth, aware that bones had been found during construction of nearby projects – indeed, some 300 ancient graves have been uncovered in Kakaako over the past two decades – went ahead and commissioned a private archaeological survey of its 67-acre site. The inventory, conducted on just three percent of the sandy area, which is where Hawaiians most often buried their dead, determined the site had at least 11 sets of human remains.
The developer submitted the report to SHPD, where it should have raised a red flag, says Thomas Dye, president of the Society of Hawaiian Archaeology and a former staff member with the agency, who estimates the site has about 330 sets of skeletal remains.

Instead, SHPD accepted the report and declined to require a more extensive survey because construction was already under way. That decision prompted the Society’s three-member board to declare SHPD had committed “serious instances of nonfeasance,” by failing to demand more information on the full extent of the site’s burials.
When the initial 11 burials were removed for re-interment, with the approval of the Oahu Island Burial Council, another 29 sets of remains were found. Since then, the iwi count has reached 64 – a figure that may include remains from more than that number of individuals.


Trouble at SHPD
The Whole Foods controversy has highlighted ongoing troubles in the SHPD, and the Society pins much of the blame on Melanie Chinen, who was named administrator in 2004 despite having no experience in historic preservation. On Oct. 20, the Society endorsed a letter calling for Chinen’s removal – a step that Gov. Linda Lingle and Cynthia Thielen, director of the Department of Land and Natural Resources (DLNR), which oversees SHPD, have declined to take.

Since former DLNR director Peter Young appointed Chinen to the post, the agency has lost 22 staff members, including many of its archaeologists. David Brown, a former archaeology branch chief, recently filed a lawsuit against the state claiming his contract was not renewed after nine months on the job because he spoke up about “illegal, unethical or culturally insensitive,” things that were occurring at SHPD.

Brown’s suit alleges that former Lingle aide Bob Awana regularly called Chinen – both of whom are named as defendants in the suit – and told her “what projects to fast track and what projects to hinder.”

Brown’s complaint also contends that Thielen (another defendant) and Chinen asked him to “provide an archeological report that would help a piece of land be rezoned without difficulty,” and were displeased when Brown “stated that he would have to do a survey according to the laws and regulations and would have to see if the land had any archeological features before he could sign a report.”

Chinen has defended her actions as SHPD administrator, attributing staff turnover to “burnout” in the high-pressure agency and unhappiness with policy changes she implemented to whip SHPD into shape. She claims her critics have the advantage of hindsight, “but we make our decisions based on the information we have at the time. There’s always a certain element of the unknown.”

Chinen also contends the agency is consistently under-funded and needs more staff. Yet many of the agency’s vacancies remain unfilled, creating a serious backlog of pending archaeological reports and permits, including some 400 on Maui and the Big Island.

But Chinen and SHPD aren’t the only ones who have been dragged with the iwi kupuna into the spotlight. The conflict over the bones unearthed at the Whole Foods site has also focused scrutiny on the state’s overall approach to handling Hawaiian burials, which arose from the controversy over the excavation of 900 ancient skeletons from the Maui Ritz-Carlton resort at Honokahua Bay in 1988.

The state ultimately paid Kapalua Land Co., the developer, $6 million to redesign the resort and move it inland. The bones were re-interred in their original burial ground, which aside from a commemorative marker is virtually indistinguishable from the hotel’s golf course.

“There’s a duty created for the next generation to care for those who came before you,” says Edward Ayau, executive director of Hui Malama I Na Kupuna o Hawaii Nei, in explaining why Native Hawaiians assumed a much more active role in burial issues following the Honokahua incident.

Ayau, an attorney, was among those who helped rewrite the state’s historic preservation law to create burial councils on each island that play a role in the SHPD review process. But while the program was intended to give Hawaiians a greater voice in how their ancestral remains are treated, it has become mired in some of the same problems that plague SHPD as a whole.

Individuals and groups like Hui Malama, which  continues to advocate for the proper treatment of Hawaiian burials, point to the Whole Foods burials as proof that the program isn’t providing the kind of protection that was envisioned. “You have a full-scale cemetery on your hands in the midst of a construction project,” Ayau says, noting that the graves of Westerners aren’t routinely disturbed. “We just want the equal protection that is guaranteed to us under the law.”


New kid in town
As both Hawaiians and archaeologists continue to call for reforms at SHPD and its burial sites program, grocers on Oahu and Maui are taking steps to prepare for the arrival of a big new kid in town: Whole Foods.
“They let others build the market and then they come in,” says Fergusson, who has been slowly expanding his vegetarian health food chain in Hawaii over the past 30 years.

 “They’re a very aggressive company and I definitely feel they will have an impact on our business,” says Donnie McGean, co-owner of Hawaiian Moons. “If they were coming to Kihei, I would be extremely worried, but they aren’t, and until that day we will continue to do the best job we possibly can. There’s not much more that you can do.”
It isn’t just the mom and pop health food stores that are concerned.

Whole Foods’ has projected some 80 percent of its expected revenue in Hawaii will come from customers currently shopping at supermarkets, Fergusson says. “To be successful, they need to take a big slab of business away from Safeway and Foodland.”

Safeway has responded by remodeling its Honolulu and Kahului markets into “lifestyle stores” in anticipation of competition from Whole Foods, which plans to open markets nearby. Down to Earth also is remodeling and expanding its Kahului store to increase the size of its produce and deli sections, and has put on hold its own plans to open new stores.

“Whole Foods coming into town is definitely a major event,” Fergusson says, noting that Maui’s health food stores aren’t engaged in cutthroat competition. “There’s peaceful co-existence. It’s all quite amiable.”

A while back, some of the local natural food stores were getting calls from “somebody doing market research” who was asking questions about the price of supplements and other products, Fergusson says. Although it raised speculation that Whole Foods was behind the inquiries, he’s not convinced that’s an issue for the $7 billion corporation.

“Quite frankly, they’re not about price,” Fergusson says. “They’re about quality and service.”

McGean says it was “definitely a shock to the system” when he learned of Whole Foods’ plans to enter the Hawaii market in such a big way. “But they will also find it’s not like doing business on the mainland. There’s definitely a learning curve with ordering and bringing in fresh produce. And finding employees is going to be a big problem.”

Although local natural foods stores aren’t looking forward to going up against a giant like Whole Foods, Fergusson says the company does deserve credit for turning consumers on to natural foods. And some of those converts do end up shopping in true health food stores.

“We don’t like to talk stink about our competitors,” Fergusson says. “Whole Foods does good things and they’ve been a big part of the growth in natural foods in America. I just wish they weren’t coming to Hawaii.”

By Joan Conrow