Following the paper trail

The battle over the HCDA's latest attempt to remake Kakaako is threatening the decades-old mandate of the agency itself

>> How it came to this

AFTER repeated attempts to redevelop state-owned oceanfront land in Kakaako, the Hawaii Community Development Authority is heading into the New Year on the verge of an agreement with A&B Properties Inc. to build an "urban village" on one of the last undeveloped waterfront tracts in Honolulu.

KEY DEVELOPMENTS Much of controversy over developing the Kakaako waterfront area is rooted in decisions made years ago. Here are the turning points: 1976 Legislature passes law creating the Hawaii Community Development Authority; charges agency with ushering mixed-use development in Kakaako. January 2002 HCDA establishes rule changes and "design guidelines" to "establish the foundation for the creation of an exceptional physical environment" in Kakaako Makai. August 2002 HCDA subcommittee outlines business plan for development; plan envisions residential and commercial development, and a desire to create a public "gathering place." October 2002 HCDA adopts plan specifying a mixed-use development and fee-simple sale of 300-400 housing units in Kakaako Makai. January 2005 HCDA issues a request for proposals from developers, proposing "an economic balance between revenue and non-revenue" components and the hope to develop 300 residences on land allowing buildings with a maximum height of 200 feet. December 2005 A&B proposes to scale back project, reducing number of condominiums to 635 in two towers; eliminating a bridge and oceanfront commercial developments, and adding parking space for surfers and beachgoers. January 2006 HCDA board expected to discuss A&B's proposed changes but not take action. Opponents expected to lobby legislators to stall project during legislative session, which begins Jan. 18.

But even as it nears its goal, the development authority faces one last obstacle, a hurdle that could prove the most daunting the agency has faced in its latest, three-year effort to get the development underway.

With the legislative session scheduled to begin in less than three weeks, opponents of the development are mustering support among lawmakers to halt the 36.5-acre project, which includes a public hula amphitheater and park space, as well as private retail space and 635 fee-simple condominiums.

The condos, which would be built on public land sold to the developer, have emerged as the main point of concern for the opponents. A&B has said the condominiums are essential, providing the financial incentive that enables the company to build public amenities that produce no revenue.

In essence, the project's future hinges on whether lawmakers will accept this trade-off: the creation of new parks and public amenities in exchange for approximately six acres of land, which A&B would be required to buy. Put another way, instead of paying cash in the form of taxes to clean up and redevelop the 36.5 acre area, the taxpayers would give up land, and A&B would foot the bill for both the land and the development.

A&B HAD PROPOSED paying $50 million for 7.5 acres of land; the price for the new six-acre figure is under negotiation. Maintenance of public spaces would be paid for with revenue from the condos and commercial retail space.

Michael Kliks, a community activist who is coordinating the opposition, acknowledged that the HCDA has openly discussed the project's residential component for years. Kliks said he has long objected to the proposal; however, Kliks said it is only now that other citizens have begun to mobilize.

Kliks said the activists hope to make Gov. Linda Lingle burn significant political capital if her influence is needed to quell legislative opposition during the session, which begins Jan. 18. Although the HCDA is largely autonomous, answering directly to an appointed board, lawmakers have the power to adopt laws controlling it.

"We're going to make it as expensive for her as we can," Kliks said of Lingle. "We're going to make her burn as many bridges as possible if this thing goes through."

Lingle said she hopes it does not come to that, for two reasons.

One issue, she said, involves the state's reputation. Having allowed A&B to spend vast amounts of time and money bidding to develop the project and following up with studies and public meetings, it would be wrong to change the rules at this point, Lingle said.

"I hope we don't create the reputation of a state whose word is no good," she said. "I think that would be very damaging over the long haul."

Furthermore, she said, the trade-off is a good one for the people.

"I think on balance it's a real benefit to the state, and I think at this point you have to look at it on balance," she said.

Although the area near the proposed development contains an oceanfront park created earlier by the HCDA, much of Kakaako Makai is "an industrial wasteland," said Sen. Fred Hemmings Jr., (R-Lanikai-Waimanalo). If the HCDA and A&B can redevelop the area using no public money, Hemmings said, that "could be a benefit for everybody, including the taxpayers."

At the same time, Hemmings said, "I'm sure that petty politics will rear its ugly head."

Sen. Suzanne Chun Oakland, (D-Kalihi-Liliha), said it was not an issue of politics, but of protecting public land for future generations. Kakaako and Ala Moana are seeing a surge of luxury developments, Chun Oakland said. In this context, Chun Oakland said she is not convinced it is prudent to sell public land for condos.

Even though A&B is required to sell 20 percent of the condos it develops as "affordable" housing, Chun Oakland said those units would carry price tags of about $300,000 each.

"That is not even close to being affordable," she said.

Regardless, she said, "I think the larger question is whether we should even be selling state assets."

Lingle said she would like more than 20 percent of the condos sold as affordable units, and she said it was important to make sure the condos are bought by local people, not absentee owners.

Lingle also said that the sale of taxpayer land should not be done lightly; in fact, she said, it might be appropriate for lawmakers to require legislative approval of such transactions in the future.

"In a broad sense, I think it's a very legitimate issue for the legislature to review, and I think they should," she said.

But, Lingle said, the Legislature granted the HCDA the right to enter such deals when it created the agency 30 years ago. And given the agency's discussions with A&B, it's wrong to call for terminating that deal.

"I don't think it's right, and I don't think it's fair at this point," she said.

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THE PROPOSED development would appear to fulfill a decades-long vision of state policymakers. In 1976, the Legislature created the Hawaii Community Development Authority to oversee development of taxpayer owned land into a "mixed-use district whereby industrial, commercial, residential, and public uses may coexist compatibly within the same area."

Over the years, the agency tried repeatedly to redevelop the site on the ocean side of Ala Moana. But developers never were able to realize their visions, which at various times included plans for a theme park, an aquarium and a man-made beach.

In the early 1990s, the HCDA built a waterfront park atop what had previously been a wasteland of ashes from an incinerator. And in the late '90s the Children's Discovery Center, a hands-on science museum, opened in the old incinerator building.

Now Kakaako appears on the verge of a renaissance. The University of Hawaii has opened its John A. Burns School of Medicine complex on land near the proposed A&B site. There are plans for a cancer research center. And Kamehameha Schools has begun preliminary work on a building designed to attract private biomedical research companies.

Although the HCDA has attempted to capitalize on this momentum, opponents say the agency has failed to heed public sentiment.

In one strong rebuke, the Ala Moana/Kakaako Neighborhood Board in November passed a resolution asking the governor and the Legislature to halt the project until there had been a "full review of the adequacy of HCDA's process of using community input prior to issuing" requests for proposals from developers.

Agendas and minutes of HCDA public board meetings show that the agency openly discussed the sale of private condos as far back as October 2002, when the authority adopted a business plan outlining its vision for the project. Also, while opponents have objected to the 200-foot height of the proposed condo towers, HCDA records show that the height was allowed as far back as 1990.

Daniel Dinell, executive director for the HCDA, acknowledged that the A&B proposal strays from the 2002 business plan in some ways. For example, the plan calls for just 300 to 400 residential units. Furthermore, he acknowledged, language in the plan implies that there would not be high-rise condo towers. Finally, the request for proposals from developers itself envisions just 300 condo units.

By contrast, A&B's original plan called for 937 condos, but a plan revised with public input now calls for 635.

Dinell said the business plan and RFP were meant to be "directional and not prescriptive." This approach, he said, was necessary to obtain the best ideas for a large-scale mixed-use development that was meant to create public benefits.

"We weren't looking to buy widgets," he said. "We were looking for the best ideas that could be brought to bear."

Sen. Carol Fukunaga, (D-Lower Makiki-Punchbowl), said the issue was not simply whether the HCDA has complied with laws concerning governmental procedure, but whether the agency has made it easy for citizens to participate.

For example, she said constituents have complained that it has been difficult for them to obtain information from the agency.

Furthermore, Fukunaga said, citizens have complained about the HCDA's standard practice of holding a public hearing on an issue, then holding a vote immediately after. The practice, she said, has created a perception that the HCDA cares little about public sentiment, but is holding the hearings as a formality.

Such concerns are particularly disturbing because of the HCDA's largely unrestrained authority, Fukunaga said.

"They really have a higher obligation to provide meaningful opportunities for people to participate," she said.

Fukunaga predicted there will be a "host of bills" introduced in the House and Senate concerning the HCDA .

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WALKING AROUND the Kakaako waterfront one recent afternoon, Dinell noted that the place was largely deserted. With students and faculty on holiday break, the new medical school was a brick-and-glass ghost town, silent except for a babbling fountain. A 300-space parking lot between it and the waterfront park contained about 30 cars.

"It's 3:15 on a beautiful day, and it's dead," Dinell said. "It's nice, but ... ."

Later, Dinell showed off other features of Kakaako, including a sunbaked parking lot and maintenance yard for county trucks and an old hyperbaric chamber. The only person in sight was a man standing by a patch of roadside weeds pouring water into a bowl for the area's main residents: a colony of stray cats.

"This is what we're protecting," said Dinell, pointing to the truck parking lot.

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LAND USE issues are not the only things bothering critics. Some neighborhood business owners worry they will have to foot the bill for road and infrastructure improvements in Kakaako Makai, Chun Oakland said. Others fear construction will kick up toxic material left in the ground by industrial facilities.

Davis Bernstein, Brownfields Program Manager for the state Department of Health, said officials have found elevated levels of lead, arsenic and petroleum products on the site, but he said the levels would not prevent the site from being safely cleaned up and prepared for development. The value of the land makes it worthwhile for a developer to clean it up, despite the additional costs, Bernstein said.

"It's almost unimaginable that the property wouldn't be worth cleaning up," he said.

A&B is now studying earlier environmental reports as part of its due diligence, said Linda Howe, an A&B spokeswoman.

Still, the main concern is land.

Chun Oakland said she has gotten calls from as far away as the Big Island, and from constituents who are normally apolitical. The calls, she said, generally involve the land issue.

But if lawmakers heed the calls and decide to kill the waterfront project, Lingle said, then Kakaako Makai for years will remain little more than a blighted wasteland.

"If this project doesn't go through, I think it could be a quarter of a century before anything is done in that area," Lingle said.

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HOW IT CAME TO THIS

The Ala Moana/Kakaako Neighborhood Board has asked Gov. Linda Lingle and the Legislature to delay the Kakaako Waterfront project until there is a study of the state agency's process for gathering public input on proposed development. However, HCDA meeting agendas and minutes show the agency discussed its plans in several public forums beginning in early 2002 before asking developers to present their proposals.

2002

» Jan. 9: HCDA approves establishment of general "design guidelines" and rule changes for Kakaako Makai to "establish the foundation for the creation of an exceptional physical environment."

» July 17: Consultants Cooper, Robertson and Partners present HCDA board a vision plan for Kakaako Makai.

» August 7: HCDA subcommittee outlines business plan for development; plan envisions residential and commercial development and desire to create a public "gathering place."

» Oct. 2: Board approves Waterfront Business Plan specifying a mix of uses -- "workplaces, recreation, public facilities, retail shops, dining and residences" -- and development and fee simple sale of 300-400 housing units.

2003

» May 14: Board approves financing study of residential component; issues include how to ensure residences are owned and occupied by local residents.

2004

» Oct. 11: HCDA issues news release announcing plan to develop Kakaako according to a master plan rather than on a parcel-by-parcel basis.

» Dec. 1: HCDA staff presents board with ouline of a request for proposals from developers, who would be required to finance and construct both commercial and public components of redevelopment.

2005

» Jan. 1: HCDA board approves issuance of request for proposals and authorizes the spending of up to $80,000 for consultants.

» Jan. 12: Request for proposals from developers is made public; RFP outlines goals and details, including a desire to "provide an economic balance between revenue and non-revenue projects" and hope to develop 300 residences on land allowing buildings with a mamximum height of 200 feet.

» April 27: HCDA "task force" recommends a list of "priority offerors"; meeting is conducted in closed-door session, but is noted on agenda.

» June 24 to August 31: During board meetings, HCDA holds a number of closed-door "executive sessions" with offerors and members of evaluation committee.

» Sept. 7: HCDA board holds public hearing on proposed changes that would allow residential development in Kakaako and increase height of buildings along Kewalo Basin harbor from 45 feet to 65 feet. Public comments are divided between supporters and opponents. Board approves changes.

» September: A&B Properties proposal selected by HCDA Board. Proposal calls for approximately 950 condominium units in three 200-foot towers, a pedestrian bridge over Kewalo Basin channel and oceanfront commercial developments. Plan also calls for public spaces, farmers' market, hula amphitheater and other public amenities.

» September to December: A&B holds meetings with citizens groups and fields hundreds of calls, e-mails and public comments on its proposal.

» Dec. 7: Based on public input, A&B proposes to scale back project, reducing number of condominiums to 635 in two towers; eliminating bridge and oceanfront commercial developments and adding parking space for surfers and beachgoers.

Source: Star-Bulletin research