City seeking $39.5 million
loan on Ewa Villages debt

By Gordon Y.K. Pang
Star-Bulletin

Budget Director Malcolm Tom's plan to rid the city of a $39.5 million debt for the Ewa Villages revitalization project is being questioned by City Council members.

"We don't need any more sugar-coating on Ewa Villages," Councilman Duke Bainum said. "We've already had a series of fire sales, with Unity House the benefactor and taxpayers the losers."

"Once again their plan is not realistic, and that's what got them in trouble in the first place," said Councilwoman Donna Mercado Kim.

Some $39.5 million of a $63.5 million bond will be "rolled over" into a new, two-year loan being negotiated in New York by Finance Director Roy Amemiya, Tom said. Assuming total payoff by March 31, 2000, the city would pay $745,000 more in interest.

Tom believes $14 million can be allocated for the first payment for the new loan by March 31.

That money would come in part from the sale of property at Renton and Fort Weaver roads to 7-Eleven Corp. for $4.4 million.

An additional $10 million would come from the sale of Ewa Villages properties to Self-Help Housing Corp. and Unity House, even though Unity House has insisted that it is not obligated to make that purchase.

Council members at yesterday's Human Services Committee meeting said Tom's projections are highly optimistic. They noted that previous Ewa Villages plans have failed, and said they saw no reason why the latest plan would work.

Money from the original 1993 bond was used to help pay for roads, sewers and other infrastructure in the dilapidated Ewa Villages when the city took over the project from Amfac/JMB earlier this decade.

The money was supposed to be paid back, in large part, from the sale of 282 market-priced homes that were to be developed by Armstrong Builders, but the developer backed out after the state real estate market went down.

An independent audit of the city Housing Development Special Fund released a year ago also blamed losses on the city's overly optimistic projection of sales, underreported potential costs and mismanaged plans.

In February, the Council approved a bailout plan that was to provide the city $38.5 million in exchange for the sale of five Ewa Villages properties.

Bainum said the city should have made the decision to roll over the original bond a year ago and waited for land values to go up before selling off chunks of Ewa Villages.

Kim criticized the new plan's attempt to use money from non-Ewa Villages projects to help pay off the loan. For instance, $5 million is to come from the sale of 40 units at Kekaulike Courtyard to a nonprofit rental entity. Also included is a $4 million premium from the developer of the city's Pawaa redevelopment project.

"It's a very optimistic plan, and that's been the case all along," Councilman Steve Holmes said. "Every time Malcolm Tom makes a prediction, it seems to be pie in the sky."

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Plan to expand
Kuhio Beach, narrow
Kalakaua gets key OK

By Gordon Y.K. Pang
Star-Bulletin

Mayor Jeremy Harris' $13.5 million plan to spruce up historic Kuhio Beach has received thumbs-up from the City Council's Zoning Committee.

The plan would add one-third an acre of beach, an acre of landscaping and three times the number of coconut trees to the beach, said Randy Fujiki, the city's design and construction director.

There also would be new beach facilities including a larger police substation and water fountains that together would form a new promenade.

The project would also reduce the number of through lanes from four to three along Kalakaua Avenue between Kaiulani and Kapahulu avenues by taking away the makai lane.

A six-week demonstration study conducted by the Department of Transportation Services concluded there would be no adverse effects from going to three lanes.

Transportation Services Director Cheryl Soon said traffic volumes did not increase appreciably both overall or during peak hours.

Travel times along both Kalakaua and Kuhio avenues were also not increased as a result of the lane reduction both overall and during peak hours, Soon said.

The shoreline management area use permit moving out of the Zoning Committee yesterday is the last of the approvals necessary for the administration, which hopes to begin construction by early spring.

Representatives from the Waikiki Improvement Association, the Hawaii Hotel Association, Oahu Visitors Bureau and other Waikiki-area business interests testified in favor of the plan.

Opponents, including transportation industry officials and some area residents, stayed away from yesterday's meeting.