Ko Olina tax credits
hinge on state budget

Legislative conferees agree on how
much to give the private project

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By Crystal Kua
ckua@starbulletin.com

Senate and House conferees are trying to find middle ground -- in the vicinity of $75 million -- in a proposal to grant state tax credits to a private development at Ko Olina Resort in West Oahu.

But whether the measure advances out of conference committee will depend on what the final state budget looks like.

The proposed complex includes a world-class aquarium, mammal training center and sports facilities. The Senate has proposed granting $100 million in tax credits, while the House version pegs the tax breaks at $50 million.

The latest version of the bill required that to qualify for the tax credit, the aquarium and mammal-research facility must be built, and 50 percent of the aquarium must be turned over to the state in the 11th year after the credit is first taken.

But yesterday's proposed compromise brings the tax credit figure to $75 million, which can be stretched over 10 years. The aquarium would be turned over to the state in the 17th year.

The tax break would be taken on construction costs incurred on the project.

The developer estimates that the project will generate $60 million in annual tax revenue.

Conferees touted the project as an avenue for stimulating the economy, creating jobs and generating tax revenues.

"The concept here is meritorious," said Sen. Donna Kim (D, Aiea), Senate tourism chairwoman.

Concerns, however, have been raised about the fairness of the tax credits and whether the development would be a precursor to gambling. Gov. Cayetano has said the proposal has not been very well thought through, and Tax Director Marie Okamura has opposed the bill.

But while discussion focused yesterday on the concepts of potential compromise, all acknowledged that the measure will not be going anywhere until the final budget picture is drawn.

Rep. Dwight Takamine (D, Hilo), House Finance and conference committee chairman, said that only "time will tell" when the budget will be settled. The measure will be taken up again at 11 a.m. tomorrow.

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