Tuesday, May 15, 2001

Dave Breitwieser, an optical engineer, demonstrates a laser
at Science & Technology International. The company
got the Legislature's approval for a $10 million bond
to move its offices from two locations into a single
industrial laboratory.

After learning
political ropes, tech
firm gets backing
for a new home

First turned down, STI
gets $10 million bond
from state Legislature

By Tim Ruel

After a quick-and-dirty lesson in state politics, a local research and development company has received the Legislature's approval for a $10 million bond to search for a new home.

Federal contractor Science & Technology International said it plans to spend several months shopping around for an old building to renovate into an industrial laboratory that could be as large as 125,000 square feet.

The company is confined to 40,000 square feet of space spread across four separate floors in the Pacific Guardian Center at 737 Bishop St. and the City Center building at 810 Richards St. Optical engineers are separated from its mechanical and electrical engineers.

"It's much more effective when you have a group of engineers working together," said Will Alameida, who joined STI about a year ago and serves as senior vice president.

The current environment is not conducive to teamwork, he said. "You've got to either pick up a phone or call a meeting and get different groups of people together."

The 20-year-old company has recently expanded its work force to 105 employees from 12, and envisions housing as many as 300 workers in the new digs.

As a primary vehicle for financing the development, STI sought special purpose revenue bonds, which are issued by the state and are cheaper than a bank loan.

But House Republicans didn't see it all so simply.

In March, all House Republicans voted against two separate bills involving STI, showing off their newly found strength in numbers to prevent the necessary two-thirds majority approval. One bill would have provided $10 million in special purpose revenue bonds to help the company build new headquarters in Kakaako. Another measure would have provided $10 million in bonds for a plant to freeze-dry coffee.

To Minority Floor Leader David Pendleton, the rejection carried a message. "We don't just rubber stamp these kinds of things," said Pendleton (R-Maunawili). Ordinarily, the measures would likely have swept right through, without a company showing proof of a viable business plan, he said.

The only problem with STI's measure was that the company had not sat down with the Republicans to explain the need for the bonds as a public purpose, Pendleton said.

"We had a real lack of information," said Rep. Barbara Marumoto (R-Waialae Iki).

Alameida acknowledged the oversight. "We were operating under a very short fuse when the bill was introduced and had very little time to meet with lawmakers," he said.

The company focused lobbying efforts solely on leaders and members of key committees, without paying attention to any particular political party. "It was interpreted as that we had not given enough attention to the Republican Party," Alameida said.

"We kind of got caught in the crossfire, and several Republicans were very honest in sharing that with us in meetings" later on, he said.

STI quickly regrouped and began meeting with Republicans, explaining that the company was hiring local people and worked on projects that served the local community.

For example, shortly after the November flooding in Hilo, STI sent a team of engineers armed with a high-tech camera to take photographs to assess the damage.

The company's growth has also come through hard-won work. In 1999, STI got a five-year $50 million contract from the U.S. Office of Naval Research to provide a high-tech camera system that could be mounted on airplanes to see submarines in the ocean.

Pendleton learned that the company is testing advanced camera systems for the ability to detect forms of cancer, a public interest that helped sway him to change his vote.

STI also scaled back its request, putting off the bond for the freeze-drying facility until next year, and removing the specific request that the laboratory facility had to be in Kakaako.

Alameida noted that the company is still eyeing Kakaako for the headquarters, but is taking a wait-and-see approach.

In June, the state board that oversees Kakaako is scheduled to vote on a special lease agreement with another major high-tech company, Adtech Inc. The deal, officials say, would offer Adtech discounted rent in exchange for the promise of jobs and equipment for students of the University of Hawaii.

STI is keeping an eye on the situation there, but is also looking at other potential spots, such as in Iwilei and Bougainville, Alameida said, declining to name specific locations.

In another vote earlier this month on the bond, every House member approved, except Republican Reps. Chris Halford and Marumoto.

To Marumoto, opposing the bond for STI was never about political muscle, she said. Rather, the project wasn't enough in the public interest. She said she could not see the link between the company's accomplishments and a bigger lab.

But Pendleton said STI had shown its expansion is in the public interest, meeting the objective of Republicans. "The point is, these things are being examined more closely," he said.

Alameida said he was grateful that Republican lawmakers had expressed their concerns and changed their minds, based on the merits of the project.

Gov. Ben Cayetano has not signed the bill, nor has he given any indication of whether or not he would approve it, a spokeswoman said.

If he approves it, STI has four years to find an underwriter for the bond, and must get the final nod of the state Department of Budget and Finance. In the meantime, STI will probably balance any growth by expanding its leased space in the two downtown buildings.

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