TheBuzz
TheBuzz
Stone between a rock
and a hard placeThe plans of Ko Olina developer Jeff Stone are on pins and needles pending the outcome of a legislative vote and a threatened gubernatorial veto, but the businessman remains "confident."
At issue is a $75 million, 10-year tax credit the resort needs to build a large-scale, interactive aquarium as a visitor attraction.
Gov. Ben Cayetano told reporters yesterday, "Right now, if I had to make a decision today, I would veto it."
He indicated that face time with those who have made commitments to build hotels, contingent on the aquarium, might cause him to put away his veto pen.
Hanging in the balance is the aquarium, a proposed marine science and marine mammal center, sports training facility and additional hotel, timeshare and commercial development.
Without the aquarium attraction, the interest of lodging and commercial companies will evaporate along with an estimated 10,800 construction jobs and 2,100 permanent jobs in the service, retail and other sectors , according to Stone.
"We have been able to convince (the state Department of Business, Economic Development and Tourism) and show everyone how this differs from any other tax bill that's out there," he said.
Sen. Colleen Hanabusa agrees. "What makes the Ko Olina bill different," said Hanabusa (D-Waianae), "is that these projects are projects that wouldn't normally be built."
The developers involved, she said, "have got to do things that have a positive impact on the area and the state before they can claim the credit. ... It's a put your money where your mouth is kind of thing."
The tax credit is capped at $7.5 million per year for a maximum of $75 million and does not take effect until 2004.
As the area senator, Hanabusa said, "it's very important to me for the economic survival of the Waianae Coast."
While Hanabusa has not had conversations with the governor about his veto inclination, she said, "I think the governor doesn't like or has had problems with tax credit bills, especially in these economic times."
He may see it as a drain or may not be convinced of any positive aspect, she said.
"It's not a hand out," Hanabusa said, "because they've got to build us something, and with the aquarium, 50 percent of the tax revenue comes back to the state for the general fund. We also get back a part of it.
"The Ko Olina bill shows really how you may want to structure tax credit bills so taxpayers benefit."
Asked about the seeming Catch-22 where development of additional lodging components is contingent on the aquarium, which depends on the governor's approval of the tax credit -- which is awaiting a commitment to build a hotel, Hanabusa said in some cases, "one thing has to break loose before the rest will fall into place. We'd like to be in a better situation, but if we were in a better situation we wouldn't need any economic stimulus."
She did not anticipate serious opposition to the bill in today's final reading in the House and Senate.
Should the bill win legislative approval, Stone and John Toner, vice president of the Ko Olina Resort Association, will fly to the mainland "to meet the groups that have shown very positive interest in joining a project with the addition of a world-class aquarium," Stone said.
The bill has changed since initial meetings, so "we have to do a face-to-face presentation to show ... how the model works," he said.
"The biggest change is that we're giving (the aquarium) back to the state," he said, but he doesn't see it as a hard-sell. "Once they see the reason behind it and the fact that the money will go to further educate and build this new (marine science and marine mammal research) industry I can sell it as a positive."
Stone plans to bring the interested parties back to the island to meet with the governor.
"We're asking for a meeting the week of May 14," and he thinks they can "convince the governor that they're ready to play."
Erika Engle is a reporter with the Star-Bulletin.
Call 529-4302, fax 529-4750 or write to Erika Engle,
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu, HI 96813. She can also be reached
at: eengle@starbulletin.com