City mulls property shakeup

A panel offers advice to the mayor, who is seeking an asset management strategy

A panel of local business leaders recommended that the city privatize its 13 affordable rental housing buildings and sell one of three public golf courses in Central Oahu as part of an overall strategy to better manage more than 700 city-owned properties.

Study Highlights Key recommendations of the city's 11-member Asset Management Review Team: » Privatize 13 affordable rental housing properties. » Sell a Central Oahu golf course. » Consolidate real estate assets under an asset manager. » Redevelop Kaimuki parking lots. » Establish a public-private partnership for managing the Honolulu Zoo.

Mayor Mufi Hannemann announced the findings of his 11-member Asset Management Review Team yesterday.

The team recommended that the city develop a clear, consistent policy for managing its real estate assets and that the management be consolidated under an asset manager.

"The real estate team basically confirmed what I had thought all along," Hannemann said, "that we lack a comprehensive and coherent policy or strategy to manage our assets."

Hannemann announced the formation of the review team in May to examine all city-owned property and recommend the best use of the assets.

The mayor said he wanted to avoid situations in the future where the administration or the City Council might look to sell property simply to balance the budget or fund pet projects.

"I think this is the best way to avoid fire sales that occur from time to time," Hannemann said. "I want a comprehensive strategy. I want a businesslike approach, and I want to make sure that we don't jeopardize the long-term financial standing of the city."

One primary recommendation was to sell the 13 affordable rental housing buildings, which are managed by two city departments.

"We felt that with the city, it wasn't really one of their core responsibilities to manage affordable housing -- that it could be better if it was privatized," said review team member Marc Tilker, president and chief executive officer of the Marathon Group of Companies.

Hannemann said he agreed with the recommendation, but added that he would insist "that it stay in affordable housing and that we don't displace existing tenants. We're going to review this exhaustively."

He said the city also would look into possibly turning over management of other properties to private companies that specialize in such operations.

The mayor noted that since the team completed its review, the city has received an offer for Alii Place downtown. Hannemann declined to provide details of the offer but said it would be reviewed thoroughly.

The review team also recommended the city sell one of three golf courses -- West Loch, Ewa Villages or Ted Makalena -- in the Waipahu-Ewa area.

Review team member Jeffrey Arce, a partner in the MacNaughton Group development firm, said all city-owned golf courses were reviewed, noting that the three in Central Oahu were near each other and the city could benefit by selling one.

Other suggestions from the panel included redeveloping parking lots in Kaimuki to attract more people and spur economic growth in the area, and establishing a public-private partnership for managing the Honolulu Zoo in Waikiki.

Hannemann stressed that no final decision has been made on any recommendation.

The mayor said he plans to have discussions on all issues and hopes to decide on many of them before he submits his proposed budget to the City Council next year.