House considers House lawmakers considering whether to grant sizable tax credits for development at the Ko Olina resort questioned whether a planned aquarium complex for the west Oahu property would be the economic windfall that supporters have predicted.
Ko Olina tax break
The developer says the aquarium
should bring in $60 million
in annual tax revenueBy B.J. Reyes
Associated PressThe House Finance Committee took up a Senate-approved measure yesterday that would allow Ko Olina developers to recoup $100 million through tax breaks.
Among the concerns of some lawmakers was whether the complex, which would include a world-class aquarium, mammal training center, sports facilities and hotels, would make any money.
Rep. Charles Djou (R, Kahaluu-Kaneohe), pressed developer Jeff Stone for a worst-case scenario that the state might face once the facility is built.
But Stone said he does not believe the facility would lose any money.
"I can't imagine we'd have any shortfall," said Stone, managing partner of the Ko Olina Co., the master developer for the resort complex.
He has billed the aquarium as a vehicle that can ultimately save the state's economy, citing the success of such attractions elsewhere.
"Look at the model for any other state ... they do generate one million to three million people a year," he said.
Stone has said the project -- to be financed with private money -- would create as many as 23,000 construction jobs and 10,000 permanent jobs, while also generating about $60 million in annual tax revenue.
Opponents at yesterday's hearing raised concerns over the fairness of the proposed tax breaks and whether the development might be a precursor to gambling.
State Tax Director Marie Okamura said her department had "very serious concerns" about the proposed legislation.
"Unlike other credits that are targeted at a specific industry, this credit will largely benefit a handful of taxpayers who have already secured a position in this particular development site," Okamura said.
"We do not feel fairness and equity can permit such a generous tax credit for such an exclusive group of taxpayers."
Rep. Jim Rath (R, North Kona-South Kohala), also was concerned that the tax breaks might hinder development elsewhere by funneling projects to Ko Olina.
Stone has said his group already has received the necessary zoning approval and several investors have signed on, but the development will not move forward without approval from the state in the form of the tax credits.
He said lawmakers should have an interest in the project because it is the state that ultimately would benefit.
The proposal calls for 50 percent of the aquarium complex to be turned over to the state after sufficient time to cover all debts, a period estimated at about 25 years, Stone said.
He noted that the Weinberg Foundation, which would provide most of the land, would own the remaining half after the 50 percent turnover.
Because the Weinberg Foundation invests most of its money in Hawaii anyway, Stone said ultimately, 100 percent of the aquarium profits will benefit the state of Hawaii.
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