Senate panel OKs
Aloha Tower
agency move

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By Richard Borreca
rborreca@starbulletin.com

The Senate Water and Land Use Committee gave Gov. Linda Lingle her first legislative victory yesterday as it approved transferring the Aloha Tower Development Corp. to another state agency.

The measure still faces a hearing before the Ways and Means Committee before going to a vote in the Senate and then to the House for further consideration.

To show the importance of the issue, Lingle appeared before Sen. Lorraine Inouye's committee yesterday afternoon to testify in favor of moving the Aloha Tower agency to the Hawaii Community Development Corp.

"It is just a commonsense move," Lingle said. "My feeling about the waterfront is that it is a tremendously valuable asset that is not being fully utilized, and we need to focus more attention there."

The 22-year-old state agency has been responsible for developing and leasing the state property at Aloha Tower.

The owners of the lease, Aloha Tower LP, filed for Chapter 11 reorganization bankruptcy last year after losing $9 million. An affiliate of Aloha Tower LP bought a $60 million mortgage for the Aloha Tower Marketplace from Mitsui Trust & Banking Co. in 1997.

The marketplace has 166,000 square feet of leasehold retail space and a market value of $32.3 million, though its development cost in 1994 reached $100 million.

At yesterday's hearing, Inouye agreed with Lingle's assessment of HCDA and urged the transfer.

Lingle told the committee: "Because HCDA has so many years of successful development along the waterfront, it seems to make sense to let them incorporate this into their entire plan.

"Right now it is just costing us money, it is in bankruptcy court and it is not on a good track. This change will make government work better and be a stimulus for the private sector," she said.

Lingle did not spell out what specific changes she would like to see made to the Aloha Tower complex of retail shops and cruise line facilities, but she said there should be more opportunities for people to live along the waterfront.

"I think residential development should be part of the experience," she said. "If you expect it to be successful, you have to have people who live in the district."

Original plans for developing Aloha Tower called for increased development, but the projects were never completed.

The agency merger plan also won the blessings of the state Transportation Department and the Aloha Tower Development Corp., although in earlier testimony, ATDC Executive Director Ronald Hirano had said it would have been better to merge with the Transportation Department instead of HCDA.

A spokesperson for Victoria Ward, which owns 65 acres in the HCDA area, praised the move, noting that HCDA has an "excellent working relationship" with the private sector.