STAR-BULLETIN / 2001 The state is moving forward with plans to privatize the Ala Wai Harbor.

Ala Wai Harbor privatization
moves a step closer to reality

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By Bruce Dunford
Associated Press

Handing over the 10-acre, 800-slip Ala Wai Harbor to the highest bidder to develop and manage as a private marina on the prime Waikiki resort location moved a step closer to reality yesterday.

The state Board of Land & Natural Resources approved a process for selecting a developer for the privatization of the harbor, which the Cayetano administration hopes will generate revenues needed to support the state's other small boat harbors, most of which operate at a loss.

However, before approving the provision allowing board Chairman Gilbert Coloma-Agaran to launch the selection process, board members insisted harbor users and harbor neighbors have a voice.

A citizens advisory committee with members representing harbor boaters, nearby residents, canoe paddlers, surfers, two yacht clubs, the Hawaii Prince Hotel Waikiki and the Ala Moana Neighborhood Board will have a role in setting minimum criteria for the development.

"The intent is to have a larger group -- the users and neighbors -- to participate in what the development is going to look like before the state goes out and entertains (development) proposals," said board member Timothy Johns.

Ala Wai boaters, long concerned about facing higher mooring fees, and other harbor users objected to the privatization, telling the board that the state was proceeding before drafting a development and business plan.

The Cayetano administration has been pushing to develop the Ala Wai as a private marina and related commercialization to generate funds to support other harbors.

Charles Brown of Westrec Marinas, the nation's largest marina services company, said his company is interested in the Ala Wai development.

However, the project would be more attractive to developers and their financial backers if the lease included the submerged lands, which, because they are ceded lands, are being excluded from the lease.

"Unfortunately right now, the department doesn't have the ability to lease submerged lands. If it did, we would be bringing all the money to the table," Brown said, adding that Goldman, Sachs & Co. would be Westrec's financing partner if it is selected. "Without it, it makes it difficult."

Submerged lands in Hawaii are considered ceded lands, which are tied up in the long-standing legal fight between the state and the Office of Hawaiian Affairs over OHA's legal share to revenues from ceded lands.

The attorney general has determined that excluding submerged lands from the harbor lease is legal, said Coloma-Agaran.

W. Mason Young, acting administrator of the Division of Boating and Ocean Recreation, said it was decided to select a developer for a long-term lease through direct negotiations with those who make a proposal instead of accepting the highest bidder.

"It gives the state more latitude in negotiating the best proposal," he said.

Young noted that after a selection committee decides upon a developer, the proposal will come back to the board for a final decision.

Bruce Middleton, an Ala Wai boat owner, spoke against the privatization of the harbor but praised the board for creating the citizens advisory committee. "Given the fact that there's a desperate need for revenues and privatization seems inevitable, the board has acted wisely to include the community in the planning process," he said. "The lack of community participation was one of the big objections."