Quantcast
StarBulletin.com

UH seeking new options to finance West Oahu site


By

POSTED: Wednesday, October 01, 2008

The end of a $100 million deal to provide the money to build a University of Hawaii at West Oahu campus does not mean the end of the dream for a permanent campus in Kapolei, UH-West Oahu Chancellor Gene Awakuni said yesterday.

The contract between UH and the Hunt Companies Inc., signed August 2007, expired yesterday after Hunt gave the university a notice of termination on July 1. Hunt planned to pay the university $100 million for 298 acres around the campus site to build housing, retail and office complexes. The UH would have used the $100 million to build its Kapolei campus.

Awakuni and Hawaii Renaissance Builders, the local Hunt affiliate, said the company and the university are still talking about alternatives to save the deal even though the contract has ended.

“;We're giving them one last opportunity to come back with a deal that we can find acceptable,”; Awakuni said. “;If they come back with an offer that is not acceptable, then we go on to plan B and find another partner.”;

Awakuni said he is confident that the university will be able to break ground for the campus in four months and that a scaled-down campus will be finished in 2010.

Four years ago, when Hunt and the university began discussions on a public-private partnership to build the UH-West Oahu campus, the housing and credit markets were completely different from today.

Housing values have declined in the Ewa plain and the credit crisis has limited the ability of builders to get financing.

Last week, Hunt pulled out of a $133 million deal to buy land for a housing development near its headquarters in El Paso, Texas. The company cited the inability to get bank loans because of the credit crisis.

Yesterday, Steve Colon, vice president of Hawaii Renaissance Builders, issued a statement saying that the contract's closing deadline was extended several times while the university and Hunt tried to work out issues, but the deal “;ultimately was not extended further.”;

According to the contract, the university had a June 30 deadline to secure zoning for the project. When the deadline wasn't met, Hunt had the option of ending the agreement without losing its $1.5 million deposit and without having to pay a $3 million cancellation fee.

The zoning hearings were postponed by the university and the city over negotiations for a transit station next to the campus.

The city and UH-West Oahu have since agreed on the transit station and a park-and-ride lot. The City Council Zoning Committee met yesterday and Council members said it appears likely that the zoning change for UH-West Oahu and the land around the campus will be approved by the committee on Oct. 28 and by the full Council on Nov. 12.

“;Nobody wants to hold up this zoning,”; said Councilman Todd Apo. “;I think everyone understands the benefit and the need for a UH-West Oahu campus.”;

Awakuni said he will be meeting with the state Department of Land and Natural Resources tomorrow to see what can be done to expedite the transfer of state land next to the campus to the city for the transit route and for the park-and-ride lot next to the proposed transit station.

The transfer of the land is a condition of the zoning change.

Awakuni said that once the UH-West Oahu land is rezoned from agricultural to commercial and residential use, he is confident that enough money can be raised from the lease or sale of the land to build the infrastructure for the new campus and at least two of the first five planned buildings.

He expects a 50-acre commercial property on the North-South Road to bring at least $40 million. The state has committed $35 million for campus infrastructure and the UH can sell $20 million in revenue bonds.

“;Once we complete the zoning process, then we're sitting on valuable real estate,”; Awakuni said. “;We're in one of the most ideal spots, right off the interchange on the North-South Road.”;