Ko Olina plans
not dead, backers say

But hotel companies say they won't
invest without something to replace
the vetoed aquarium project

---

By Russ Lynch
rlynch@starbulletin.com

Development at the Ko Olina resort has been seriously slowed, but not killed, by Gov. Ben Cayetano's veto of a bill that would have provided a $75 million tax credit to build a world-class aquarium at the West Oahu resort, supporters of the project say.

"We are working very hard and will continue to work hard to get development for what the aquarium would do, provide a stimulus for the resort, jobs for Waianae," said John Toner, vice president of the Ko Olina Resort Association and a close associate of the resort's developer, Jeff Stone.

"We are still talking. We have every hotel in the country looking at us," Toner said.

But now that the tax credit is dead, so is the aquarium project. The resort, timeshare and retail companies who had promised hundreds of millions of dollars in investment have pulled out, Toner said.

"We just don't understand why (Cayetano) didn't look at the bigger picture," he said. "The people we work with are very sensitive about the community" and the governor has cut off a source of jobs and income for that community.

In his veto message, Cayetano said he does not believe Ko Olina proved its benefits and he opposed the idea of giving support to one project rather than something that would benefit the whole Hawaii community.

The Ko Olina credit "would not benefit the tourism industry as a whole, does little to ensure additional economic growth would be created, is difficult to administer and contains vague language that leaves it open to misinterpretation," Cayetano said.

Of course, the Ko Olina Resort Association disagrees.

"This was really going to trigger economic development and help a part of the island that has not gotten any attention," Toner said.

He cited physical examples that anyone driving along the Leeward Oahu coast can see,  such as empty store fronts and vacant homes.

Hotel and timeshare companies said their commitment to new projects at Ko Olina was entirely dependent upon the aquarium and its related education and entertainment facilities.

Hilton was firmly committed to operating a hotel near the aquarium, but won't consider it unless there is a huge central attraction such as the aquarium, said Peter H. Schall, senior vice president-Hawaii region for Hilton Hotels Corp.

"You need to have something to attract people to go out there," Schall said. Without the aquarium or something just as attractive there is not enough infrastructure at Ko Olina to attract enough people, he said.

Among the deals that were contingent on the aquarium was a hotel of several hundred rooms to be built by Ko Olina's developers but managed and marketed by Hilton, and a resort and timeshare complex to be run by a Canadian company, Intrawest Corp.

Marriott, however, did not need the aquarium to make its own commitment.

The company already manages the J.W. Marriott Ihilani Resort & Spa and its golf course, and launched its own semi-high-rise timeshare complex there, now well into construction.

Linda Lingle, Republican candidate for governor, said Cayetano's veto "will long be remembered as a missed opportunity" and an example of why Hawaii has a high rate of people living in poverty.

"He had a chance to help the people of the Leeward Coast by relieving the chronic unemployment, poverty and social problems that have plagued the area for decades and he blew it," Lingle said in a statement.

Another Republican, state Rep. Charles K. Djou (Kaneohe), said he was disappointed because the Legislature this year did almost nothing to help the Hawaii economy and Cayetano single-handedly wiped out the little that the lawmakers had achieved.

Another vetoed measure would have provided a 4 percent tax credit for commercial construction over the next three years.

"I think it is extraordinarily ironic that the governor decided to veto it. He was the proponent of the world-class aquarium in the first place," Djou said.

In the end, the credits would have cost taxpayers nothing and would have provided thousands of jobs in West Oahu, Ko Olina supporters say.

Jobs would have been created in the first year, with more than $60 million in new construction, and in the end the development would generate more than $186 million in state taxes and create several thousand new jobs, they said.