STAR-BULLETIN / 2002 Mike Hatcher does a "stoppie" during a motorcycle event last year at Hawaii Raceway Park. The general partnership that owns the park is lobbying for a bill that would help it replace the overcrowded facility.

Credits would fund
new raceway

A bill that would provide tax
breaks for a new motor sports
park at Kalaeloa is among dozens
scheduled to be taken up today

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By B.J. Reyes
Associated Press

Though it remains alive in the Legislature, a bill that would provide tax breaks for private investment in a new motor sports park at Kalaeloa faces an uphill battle.

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That's nothing new for Mike Oakland, who has worked for 15 years to build a new racetrack to replace the aging, constantly booked Hawaii Raceway Park in West Oahu.

"It's hard work," said Oakland, president of HMI Inc., the general partnership that owns the park. He declined comment yesterday on what he thought of the bill's prospects for passing this session.

The bill is among dozens scheduled to be taken up by the House today as each chamber approaches Thursday's deadline to complete work on the other side's bills and return them to start working out differences in conference committee.

A House version of the Kalaeloa bill was stalled earlier. The House Finance Committee last week approved a Senate version of the bill, but amended it to include a provision that the credits could not be claimed unless the economy shows sufficient growth.

The Senate bill already had been amended to remove the amounts, which originally stated that investors would be able to claim a maximum of $50 million over six years. If they choose to take up the bill, House and Senate conferees would be tasked with determining how much investors could claim.

The bill is similar to a measure providing tax breaks for investment in a world class aquarium project at Ko Olina Resort and Marina in West Oahu, and has drawn similar criticism.

Lowell Kalapa, president of the Tax Foundation of Hawaii, called both bills nothing more than a subsidy.

"Where will this all end?" Kalapa asked in testimony to the finance committee. "If one development is blessed with a substantial tax credit, why shouldn't the next proposal be just as serious a consideration?

"As such, all of these project specific tax credit proposals violate the integrity of the tax system setting a precedent with bad tax policy."

Finance Chairman Dwight Takamine, D-Hawi-Hilo, said he included the economic growth provision as a means of advancing all tax credit bills for the purpose of further discussion.

Supporters say that tax credits are needed to attract private investors to the project.

In his testimony, Oakland noted that similar projects in Las Vegas and Miami have been a boon to those cities' economies.

The first phase of the proposed new facility would include a 1.1-mile tri-oval track, a road course, drag strip, stock car and go-kart tracks and 2,000 parking stalls at a cost of about $20 million.

"I have been able to design a facility that will be able to provide all the required services and safety features that meet most of the new requirements with a minimum of restrictions," Oakland said.

He added that the new facility also would be a step toward curbing illegal racing that takes place on roads and highways -- a reason cited by the Honolulu Police Department in its support for the Senate bill.

"In the interest of safety on our public roads and highways, there should be a motor sports recreation facility which will provide a safe and supervised alternative to the dangerous practice of street racing," Maj. William Chur said in testimony to the finance committee.

But even if the bill passes, land is another issue that will have to be worked out before development can begin.

The planned site for the project is a parcel of land in Kalaeloa, the title of which has been conveyed from the U.S. Navy to the Department of Hawaiian Home Lands. The department says the parcel's proximity to the airport runway at Kalaeloa makes it unsuitable for homestead development.

In January, officials announced a land swap agreement by which the raceway group would purchase 180 acres of agricultural land along Kunia Road across from the Royal Kunia subdivision, and exchange it for the parcel in Kalaeloa.

But Hawaiian Home Lands Director Micah Kane said last week that the potential exchange is one of several options under consideration, adding that his agency, "has not committed to acquiring the Kunia parcel."

The Hawaii Farm Bureau raised concerns that the land swap could ultimately lead to the shutdown of a working farm on the Kunia land. Kane said his agency has met with farm bureau representatives and is aware of the concern.