want a go on
Block J tower
The downtown affordable rentalBy Gordon Y.K. Pang
project has been scaled down
by the developer
City Council leaders hope downtown's long-stalled Block J affordable rental project will proceed, despite the developer's new plan to first build only one of two proposed towers.
"If the second tower isn't built, the only person who's going to get hurt is the developer," Council Chairman Jon Yoshimura said yesterday.
Coastal Rim Properties President Franco Mola told the Council Budget Committee that a $118 million, 468-unit tower will be built first. Original plans called for a $167 million, 913-unit project in two towers on the four-acre municipal parking lot bounded by Pali Highway, Beretania, Queen Emma and Kukui streets.
The committee will decide tomorrow whether to give the nod to a resolution authorizing the changes to the lease and development agreement with Block J and Associates, Coastal Rim's local affiliate. A final vote is expected in December.
Financiers of the project are unwilling to back both towers at once because of the state's troubled economy and depressed housing market, Mola said.
Budget Chairwoman Rene Mansho noted that the key promises made to the city remain in the development agreement despite the revised time frame.
Those include an $8 million up-front "premium" payment to the city, the creation of a $5 million park at the current Smith-Beretania parking lot, and 1,081 public parking stalls to replace the existing 208.
The $8 million premium, now slated to be handed over by March 31, 2000, is essential to the city because Mayor Jeremy Harris has counted it as revenue in this fiscal year's $1.02 billion operating budget.
The city would also get $650,000 in annual lease rent from Coastal Rim for the development rights to the parcel for 65 years.
That amount would escalate to $1.36 million annually after five years regardless of whether the second tower is built.
The new plan also allows the developer to use some 50,000 square feet under Pali Highway and Kamalii Park to construct a parking garage that would go four levels below the surface.
Councilwoman Donna Mercado Kim reiterated long-standing questions about the project, noting that it is already more than a year behind its original schedule.
Kim also criticized Council leadership for leaving her in the dark on the changes.
Mola said his company has continued work on the project despite the state's economic difficulties, adding that he believes the $8 million premium could pay for the property in today's real estate market.
"We're still sticking to our guns," he said.
"At least we're still here and at least we're still spending money."