City Council The Honolulu City Council today is scheduled to decide whether to take over the empty Queen's Court office building on Nimitz Highway as partial settlement for money the city is owed on the remaining fee interests at Harbor Court.
debates takeover of
Queen’s Court offices
Supporters claim city will save
money by making the moveBy Gordon Y.K. Pang
Star-BulletinAHI Limited Partnership owes the city between $12 million and $14 million for the leased fee rights in 84 residential units at Harbor Court and accrued interest.
AHI's latest proposal calls for giving the city $7 million cash and the fee interest in the six-story Queen's Court, which has not been occupied since it was built as part of the Harbor Court complex in 1994.
Harbor Court was built on property owned by the city, which retained the fee-simple interest on the land. Later, Harbor Court's owners agreed to purchase the fee on all the units to make them more attractive to buyers but slow sales forced the original developer into bankruptcy leaving the city with the remaining fee interests in the 84 units.
The Queen's Court plan has the backing of Mayor Jeremy Harris, who wants to use 38,794 square feet in the building for city office space.
"We think it's a good offer that the Harbor Court developers have put on the table," city Managing Director Ben Lee said yesterday. "We can use the office space and the portions we don't use we can rent to private companies."
Lee said the city wants to consolidate its agencies and stop paying an estimated $700,000 annually for space it rents in privately owned downtown office buildings. Part of the plan, announced yesterday, includes moving several agency offices to the new Kapolei Hale.
The Council's Planning Committee yesterday unanimously approved a development plan amendment that clears the way for the building to be used as government office space.
But several Council members made it clear they still are not convinced taking over Queen's Court is a good idea.
Councilman John Henry Felix said the Council's own analysis shows the city would be short about $11.9 million factoring in the loss of lease income, the real property taxes now paid by AHI on the property and an estimated $3.5 million needed to bring the building online.
"A building deteriorates substantially when it's empty and they've only done a cursory study," Felix said.
Council members Gary Okino and Rene Mansho also raised concerns about taking over Queen's Court.
Lee and the administration, however, submitted a report to Council Policy Committee Chairman Romy Cachola late yesterday showing that the city would save $139,801 annually in net rent if it took over Queen's Court.
Lee said the Council's analysis did not take into consideration the savings the city would accrue by no longer needing to rent outside.
City & County of Honolulu
