Queen Street project's costs balloon

The controversial road improvements may be delayed indefinitely because of the higher costs

Improvements to a rundown stretch of Queen Street between Kamakee Street and Ward Avenue in Kakaako, originally scheduled to begin this month, have been delayed because of a nearly 60 percent increase in costs.

The state Hawaii Community Development Authority had planned to start construction in January, but now the project may be delayed indefinitely. The state agency will likely decide what to do next month, executive director Daniel Dinell said.

Construction costs, originally estimated at $10.8 million in an April 2005 contract with Kiewit Pacific Co., went up to about $17 million -- well above the budget approved back in late 2004.

Small-business owners along the street oppose the project because they would have to pay higher property taxes if it were to happen.

And adding a further twist to the matter, a portion of the city's planned rail transit route might run through part of Queen Street.

Dinell said it was not just increasing construction costs, but the additional scope of the project, that jacked it up by another $6 million. The city wanted more drainage work than the HCDA anticipated.

"It's an unfortunate situation" Dinell said. "We're disappointed because we've worked so hard addressing the needs of the businesses and arranging alternative parking. These new and more expensive standards have made it impossible for the project to work within the existing budget."

In late 2004, the state authority earmarked $15.6 million in total costs for the project, which included costs for land acquisition, design, construction management and temporary parking. It was scheduled to start in March 2005 and take 15 to 18 months to complete.

Kiewit Pacific won the bid for the project, then estimated at $10.8 million. But since the company did not get the green light to start on time, it came back with a new cost estimate.

"While we're disappointed that the costs have increased so much, we absolutely don't want to compromise our standards," Dinell said. "We're committed to doing the job right. We have to do the responsible thing, step back, and reassess the project based on community and board input."

Queen Street, a light industrial area, is home to several auto body shops, furniture stores and other small businesses. The street is in poor condition, full of potholes, and floods quickly when it rains.

HCDA's board yesterday discussed two possibilities: Either cancel the project altogether or do it in two phases.

The first phase would include installing a traffic light at the intersection of Kamakee and Queen streets, as well as improvements along the Ewa side of the street. The second phase would continue the improvements to Ward Avenue.

Either way, HCDA would have to put the project back out for bidding.

"We've thought and we still believe that this is a good project," said Dinell. "It upgrades a deteriorating area of Kakaako, with much-needed infrastructure and safety improvements."

Plans for the Queen Street improvement project are part of a process that began two decades ago to systematically upgrade Kakaako's infrastructure.

Improvements include new water, sewer and drainage systems, along with sidewalks, gutters, street landscaping, underground utilities and metered curbside parking.

The street would be paved and widened to four lanes, with sidewalks.

John Breinich, chair of the Ala Moana Kakaako neighborhood board, said the board supports a new traffic light at Kamakee and Queen Streets. "It's a safety issue," said Breinich. "Now, with this delay for the whole project, that's also in limbo."

But several small-business owners, such as Cliff Garcia, owner of Tropical Lamp & Shade, oppose the project because they don't want to pay higher property taxes to fund the work.

After complaints, the HCDA lowered the tax assessments. The funds would not be due until the project is completed, and could be paid in installments over 20 years.

Garcia, whose assessments were originally set at about $135,000 to pay for the project then lowered to $90,000, said he still does not want to pay.

"I'm not against improvements," Garcia said. "I know we need improvements, but I'm totally against the assessments. They should wait for this rail to be worked out. Why start work on this and stop at Ward Avenue? Delay it another 10 to 15 years. We don't need it right now."

Meanwhile, HCDA is also grappling with the future of 36.5 acres along the Kakaako waterfront after development plans last year were scrapped because of outcry over the sale of state lands for a mixed-use project that would have included luxury condominiums.

In December, consultant Townscape Inc. began meeting with stakeholders to put together a public advisory group for the development of Kakaako waterfront. The HCDA yesterday also announced Belt Collins Hawaii Ltd. as the consultant to update affordable housing guidelines in Kakaako.