Haleiwa Is Losing a Landmark. A Mile Away, the Old Sugar Mill Is Gaining One.
In the final days of January 2026, people lined up outside a coffee shop in the North Shore Marketplace for one final cup. The Coffee Gallery had been pulling espresso there for nearly four decades, long enough that regulars measured their own lives against it: first dates, paddling club mornings, the same corner table every Tuesday. Then it closed, with only a few days' notice to staff and customers.
A mile west, in Waialua, a different kind of opening was drawing its own crowd. Inside the old sugar mill, in a building that spent decades as an equipment shed, Haleʻiwa Distilling Co. now runs guided tours four days a week and pours mojitos made with limes hand delivered by a local farmer. It opened in July 2025 as the first rum, whiskey, and gin distillery the North Shore has ever had.
Same coast, same season, two very different stories. The thread connecting them is not sentiment. It's the ground underneath both buildings, and who controls it.
The North Shore Marketplace has looked the same since 1985, when developer Howard Green built the plantation-style courtyard that now holds Cholo's, Banzai Sushi, Britton Gallery, and about twenty other small shops along Kamehameha Highway. Green owns the buildings. Kamehameha Schools owns the land underneath them, and leases it to him on a long-term ground lease.
That lease came up for renegotiation, and the numbers moved fast. In late 2024, the North Shore Chamber of Commerce reported that average commercial rents across Haleiwa were set to climb from roughly $7 to $10 a square foot toward $10 to $14, a shift that would ripple straight through to the tenants who lease space from Green rather than from Kamehameha Schools directly. Hawaii News Now covered the increase at the time, quoting Chamber chair Mike Biechler on the position Green was in: raise rents on his tenants or risk the numbers not working at all.
By early 2026, the pressure had compounded. A new arbitration set Green's annual ground rent on a path from $144,000 toward nearly $1 million, a jump he said would force rent increases across his roughly twenty-five retail tenants. KITV reported that the terms couldn't be reconciled, and Kamehameha Schools is now expected to acquire the Marketplace outright. The handover of daily management began February 1, 2026.
The Coffee Gallery's closing announcement landed in the middle of that transition. Kamehameha Schools has said publicly that the lease decision belonged to Green, the ground lessee, and that KS wasn't involved in negotiations between the shopping center and its individual tenants. Whatever the exact mechanics, the timing tells its own story. KHON2's coverage captured Cholo's manager Stacy Lieser describing the mood among the remaining tenants as one of waiting, patiently, for clarity that hasn't fully arrived.
"It's very difficult to try to prepare yourself for future change so everybody's a little uneasy and not sure what's happening."
That's Lamont Brown, who owns The Fixx Haleiwa and Maya's Tapas and Wine, both at the Marketplace, speaking to the uncertainty that comes with a landlord change nobody chose. Kamehameha Schools has said it won't raise tenant rents in the first year and will honor existing leases. Beyond that, there's no announced redevelopment plan and no confirmed timeline for what the property becomes next.
The old Waialua Sugar Mill operates under none of those constraints, because it isn't the same kind of property. The mill closed as a working plantation in 1996, the last one on Oahu to shut down, and the 25 acres it sits on are zoned industrial rather than commercial retail. That distinction matters more than it sounds like it should. Industrial space doesn't carry the same foot-traffic rent math as a highway-facing shopping center built for tourist volume. It's been marketed, in plain terms, as build-to-suit space for anyone who does business on the North Shore, not as a retail destination.
That difference is exactly what let a small-batch distillery, a soap factory, and a coffee-and-chocolate mill move into converted plantation buildings without competing for the same lease economics squeezing shops a mile away. North Shore Soap Factory operates out of the mill's old bagasse bin, the cone-shaped building that once held sugarcane pulp byproduct. Bob's Coffee and Chocolate runs tours through its roasting and fermenting process a few doors down. Neither business needed the kind of rent structure that's currently unsettling tenants at the Marketplace.
Haleʻiwa Distilling Co. is the biggest addition, and it opened with intention. Founder and master distiller Sisler built the operation around ingredients sourced within a few miles of the mill, ordering roughly 75 pounds of limes a week from a local farmer who hand-delivers them, and using sea salt sourced in Haleiwa itself. General manager Kristin Salcido has said the goal from the start was to keep the supply chain local enough that every bottle carries the address on it.
A few things worth knowing if you're headed there:
A short walk away, Mele Mele Bakery has been running a second life after dark since October 2024, turning into Kava Queen Kava Bar most evenings. And according to regulars who stop by often, a brewery is already under construction elsewhere on the mill grounds, which would give the property a third beverage business inside a single footprint that, five years ago, was mostly quiet.
None of this replaces what the Marketplace has meant to the coast for forty years. But it's a real answer to a question North Shore residents have been asking out loud: where does new small business energy actually go when the old commercial strip gets expensive.
One more piece of local knowledge worth having straight, because even longtime residents mix this up. There are currently two markets on the coast using close variations of the same name, and they are not the same event.
If a neighbor tells you the market moved, ask which one they mean before you drive out.
The easy read on all of this is decline in one place, growth in another, and a coast caught in the middle. The more accurate read is that the same underlying force, land ownership and the economics attached to it, is producing opposite outcomes depending on what kind of ground a business happens to be standing on. Kamehameha Schools controls a majority of the commercial land along this stretch of highway, and where that ownership runs through a retail ground lease, tenants are absorbing real pressure. Where a property sits outside that structure entirely, like the Sugar Mill, new concepts are opening at a pace the Marketplace hasn't seen in years.
For anyone who's lived here long enough to remember what the Marketplace looked like before Patagonia moved in, this is worth watching closely over the next year. Not because the outcome is settled, it isn't, but because the answer will say a lot about what kind of North Shore comes next.
For those curious about how these shifts in Haleiwa and Waialua translate into value for property owners along the coast, Elise Lee has spent nearly two decades tracking how North Shore neighborhoods evolve, block by block. If you'd like an informed, ground-level read on what's happening near your own address, request a private consultation.
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Elise brings a fresh, creative international perspective to her Luxury Real Estate, Concierge & Interior Design career. She chairs the Honolulu Board of Realtors® City Affairs Committee, is on the Board of Directors for the Hawaii Economic Association, an Officer in the Confrérie de la Chaîne des Rôtisseurs Hawaii Bailliage.