STAR-BULLETIN /2001
Tax credits for development at Ko Olina are receiving a favorable response at the Legislature.
Ko Olina tax credits Gov. Linda Lingle's support for $75 million in tax credits for development at the 640-acre Ko Olina Resort and Marina is already giving a boost to the proposal, which was nixed last year by then-Gov. Ben Cayetano.
on the move
The proposal is getting
a better reception from
the Lingle administrationBy Tim Ruel
truel@starbulletin.com
Several state agencies came out in support of the tax credit yesterday in a hearing before the Senate Committee on Tourism, which passed a Ko Olina tax-credit bill in a unanimous vote.
"This could be the year," said Sen. Sam Slom (R, Hawaii Kai).
Last year, the state Department of Taxation opposed the credit, which would be targeted specifically toward a proposal by Ko Olina developers to build an aquarium, marine science and mammal research facility.
This year, the Tax Department is all for it.
"What a difference a year makes," said Sen. Donna Mercado Kim, chairwoman of the tourism committee.
Supporters of the tax credit, including a confluence of unions, residents and developers, say the project would create 10,000 temporary jobs and 2,000 permanent jobs for the weak Leeward Oahu economy. The ensuing economic activity would generate enough tax dollars to make up for the lost tax revenue.
But the credit still has its detractors, such as the Tax Foundation of Hawaii, which said the tax credit is bad policy in this instance because such relief is normally directed toward low-income taxpayers.
When Cayetano vetoed the tax incentives last year, he said the bill did little to ensure that economic growth would be created, and was vaguely worded.
In her recent state-of-the-state speech, Lingle reiterated her support for the tax credits, but said she needed a "binding promise" of the developers to pay for training for local residents.
Yesterday, the Ko Olina developers said they will provide a commitment to local job training, under a memorandum of understanding that would be signed if the law is passed. Ritz-Carlton, which has signed a letter of intent to build a hotel at Ko Olina, would provide training. The Harry & Jeanette Weinberg Foundation, which would provide the land for the new developments, would provide funding for training, said Jeff Stone, principal of Ko Olina Co.
This year, the developers are also talking about the development of a travel industry management intern campus for students.
"With the tax credits creating a new attraction, we have shown commitments from companies like the Ritz-Carlton, Hilton Hotels and Intrawest Resorts to bring new development to Honolulu," Stone said in written testimony. Developers have already spent more than $1 billion on Ko Olina, and nearly another billion dollars in construction is expected in the next decade.
Under questioning by Slom, Stone reiterated a promise that the development of the aquarium is not a back-door attempt to bring gambling interests to Ko Olina.
State Department of Taxation
Tax Foundation of Hawaii
