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The Honolulu Advertiser
Posted on: Sunday, December 25, 2005

Public land, private purpose

 •  Hawai'i Community Development Authority members
 •  HCDA PowerPoint presentation on Kaka'ako project
 •  A changing landscape
 •  A changing landscape: A look at the future: images from the present and the proposed
 •  A changing landscape: Kaka'ako Makai history
 •  Housing potential recognized for waterfront

By Andrew Ggomes
Advertiser Staff Writer

The Kewalo Basin area faces major change, including the addition of condos. Many residents feel commercialism is inappropriate for the area.

ADVERTISER LIBRARY PHOTO | March 28, 2005

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WHAT’S NEXT

The Hawai'i Community Development Authority board meets Jan. 4 to discuss revisions that Alexander & Baldwin Inc. made to its development proposal earlier this month. The agency board could approve, reject or suggest changes to the plan.

If the board approves the revised plan, the agency and A&B still would have to agree to general development terms in a joint letter of intent, which could happen before Feb. 1.

If the agency and A&B execute a letter of intent, the two parties would still have to finalize terms, such as revenue paid to the state, which could take another couple of months.

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1) A fishing shack stood on the shores of Kewalo Basin before the area was developed as a small-boat harbor.

Hawai'i Community Development Authority photos

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2) Workers make improvements to Kewalo Basin in 1934.

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3) A modern-day view of Kewalo Basin’s harbor.

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4) Two condominum towers are shown in an artist’s rendering of Alexander & Baldwin’s planned development of the Kakaçako waterfront

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Workers processed tuna in a Kewalo Basin canning plant that was closed in later years.

Advertiser library photo

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A plan to build two 20-story condominium towers along the Kaka'ako waterfront as part of a privately financed retail and recreational development project on state land could be advanced or abandoned in the next month or so.

The debate over how the state should best use a precious and irreplaceable public resource — waterfront property — has stirred deep emotions.

Plan supporters say selling state land for housing is necessary to pay for public improvements that will transform decayed industrial property into a livelier, more attractive area for the broader community to enjoy. Opponents say it's wrong to sacrifice a piece of rare and valuable public real estate that should be for the use of all.

Depending on which view prevails, the mostly state-owned Kaka'ako peninsula could undergo its most dramatic change since a shallow reef was filled in to form the roughly 200-acre area more than 100 years ago.

"The land is priceless," said Andrew Yanoviak, a private architect and planner working in Hawai'i since the late 1960s. "We have a responsibility to the future."

It is the first time the state has tentatively accepted a development proposal for the area that includes fee-simple homes.

Other urban renewal plans over the last 40 years have envisioned everything from a convention center to a grand central park with a sandy beach on what has been one of Honolulu's most fertile fields of dreams.

The previous visions — proffered by a long line of state planners, private architects, governors and developers — also included museums, office buildings, inland waterways, a world-class aquarium, a wellness center, a high-tech park, an indoor snowboarding complex, hotels and a waterpark.

All the ideas promised to help transform the grubby neighborhood between Honolulu and Kewalo harbors makai of Ala Moana into a vibrant gathering place.

Most plans have come and gone: Gotcha Glacier, Kewalo Pointe and Kaka'ako Beach.

A few have been realized: Kaka'ako Waterfront Park, a children's museum and the University of Hawai'i's medical school.

A semi-autonomous state agency, the Hawai'i Community Development Authority, is considering the latest development plan, which it tentatively selected in September after publicly soliciting proposals from the private sector in January.

The agency's pick was a $650 million proposition from Honolulu-based Alexander & Baldwin Inc. to transform 36.5 acres of state property, including the rim of Kewalo Harbor, an inland parcel and an oceanfront site fronting Point Panic.

A&B initially proposed developing three 20-story condos with 947 units on the inland parcel, a commercial village along the harbor, a pedestrian bridge over the channel, public parking and a public oceanfront hula amphitheater and park that would expand the existing 30-acre park by 10 acres.

Earlier this month, A&B revised its plan in response to community concerns, eliminating one of three condo towers, canceling the bridge, leaving the diamondhead-makai side of Kewalo Harbor untouched and increasing public parking and eliminating a restaurant, banquet and entertainment facility in the Point Panic amphitheater and park site.

The changes pleased many ocean and harbor users. But other community members remain vigorously opposed to any use of public land for private residences, even though the state would be paid for the property and agency rules require 20 percent of the condos be sold at prices affordable for moderate-income buyers.

"It's really an inappropriate use," Yanoviak said. "We have to draw a line somewhere."

Some residents like Yanoviak want the area reserved for public recreation similar to the 100-acre park idea that a visiting team of the nation's brightest planners and architects recommended for the peninsula in a 1974 planning report.

"I don't think that's so unreasonable," said Judy Pavey, a Ho-nolulu personal injury attorney. "It's a huge and final lost opportunity, to do any commercial development there. It's the last piece of (available) property on the south side. Once this is gone, it's gone."

Others say the state should use its land to produce low- to moderate-income housing, which was a primary objective for parts of the peninsula under the Hawai'i Community Development Authority's initial plan for the area in 1983.

"I would have no problem at all having moderately priced dwellings on some portion of the 36 acres," said Robert Lloyd, a Mainland retiree who moved to 'Ewa Beach three years ago. "But to develop condos with million-dollar price tags — we have enough of that."

Ray Kawabata, a retired Pearl Harbor shipyard worker, said he'd support three residential towers if one were for low-income seniors.

The agency's strategy is to use private commercial and residential development to pay for expansion and maintenance of the park, and bring more people to the underused area.

"It's not a lot of land (for the condos), but it's important in terms of creating that energy and activating that space," said Daniel Dinell, Hawai'i Community Development Authority executive director.

Dinell said some of the public's ideas for the peninsula, such as more park with little or no commercial development, are misguided because a bigger park, in his view, wouldn't attract more people but would increase taxpayer expense.

"All park I don't think we've ever thought would work from a social or economic point of view," he said.

It cost $22 million to build the initial 30-acre waterfront park in 1992 atop the area's bulging garbage dump. Added later were a six-acre mauka park extension for $7 million, and a five-acre park on the diamondhead side of Kewalo Basin for $3 million.

The agency pays $750,000 a year for basic park maintenance that covers cleaning, landscaping and security but has left the park with $950,000 in needed repairs to its spalling seawall, eroding patches of brick walkway and two damaged water fountains.

"It's an example — 15 years of deferred maintenance costs you $1 million," Dinell said. "The state has an easy time building things, but has a hard time maintaining things."

The agency intends to transfer 100 percent of park maintenance financing to condo owners and commercial space tenants through community association fees that would be conveyed through perpetual deed covenants. The agency would continue to own and operate the park.

Bill Littell, a local marina consultant not involved with the A&B project, said selling some state land to finance a park expansion and maintenance is a prudent trade-off for a state that has difficulty taking care of existing parks.

"They build it and they abandon it," he said. "Once you build it, somebody's got to take care of it."

Other residents, however, want no condos and more park space regardless of taxpayer expense.

"We are adamantly opposed to any residential and all luxury commercial development in Kaka'ako makai," said Michael Kliks, a paipo boarder and bodysurfer who has protested A&B's project and advocates a redevelopment scenario with about 25 acres of additional park and public parking, a biotech complex and three small commercial buildings.

Other proponents of expanding the park said numerous condo towers under construction in the area of Kaka'ako mauka of Ala Moana will increase park space demand.

City planners predict that Kaka'ako will be one of the fastest-growing residential neighborhoods on O'ahu over the next 25 years, with more than 25,000 people moving in, increasing the neighborhood population by 178 percent.

Dinell said the existing 41 acres of Kaka'ako park space makai of Ala Moana is vastly underused, with the main park's 300-stall parking lot never close to capacity, except on July Fourth.

On a recent weekday shortly before sunset, parking lots for the waterfront park were about 20 percent full, compared with roughly 60 percent at Ala Moana beach park.

"Where's the people?" Dinell asked. "It should be packed, in a good way, with people enjoying themselves."

Yanoviak, the local architect, believes that poor use of the waterfront park stems from bad park design — chiefly the lack of flat space that resulted from building the park on the rubbish heap that rises 30 feet to 47 feet and blocks the ocean view from inland.

"Get rid of that big berm and you'll see more people (using the park)," he said.

Dinell believes that what is needed are adjacent residents and commercial activity — including restaurants, shops and a farmers' market somewhat like Seattle's Pike Place Market — that results in more people spending the day and evening in the park.

"Look at Sand Island State Park," he said. "There's plenty of acreage, there's even a beach. But the facilities are in such poor repair, and there's not a lot of sense of ownership or care. There's no soul."

Two other major Honolulu parks, Ala Moana and Kapi'olani, are heavily used because they have adjacent beaches and other people magnates like ball fields, tennis courts, canoe clubs and large amphitheaters, Dinell said.

Kaka'ako Waterfront Park lacks all of that. "It's more of a strolling promenade," Dinell said. "Without the beach, this is not going to be a popular park."

Gov. Linda Lingle said her view is that a residential community in Kaka'ako makai is key to successfully redeveloping the area, and that partnering with a private developer to improve most of the state-owned site for public benefit makes sense.

"I don't think you could have the level of public improvement without the kind of financial reward we would get from (the land) sale," she said. "I don't think the state is going to be willing or able to invest that kind of money for a park in that area."

Lingle said she would like to see the project have more emphasis on affordable housing, beyond the agency's 20 percent moderate-price requirement. But she also fears that the land will sit for another couple of decades if the project doesn't go forward in some form.

The state Economic Momentum Commission has suggested that the state use project proceeds to buy 500 acres of federal land at Kalaeloa on which to build affordable housing with the city.

It has historically been the Hawai'i Community Development Authority's intent to recoup some of its investment in Kaka'ako makai by leasing and/or selling land for private commercial development, whether it be retail stores, office buildings or residential condos.

To date the agency has spent $77.5 million on improvements to the peninsula, including parks, sewers and roads. It still needs another $30 million of estimated infrastructure improvements.

Under its original proposal, A&B projected that the state would earn about $700,000 a year over the next 30 years from commercial tenant rent, though that is expected to be a little less under the revised plan.

A&B in its original plan also estimated it would pay the state $50 million to buy the land slated for condo development plus $12.5 million in public impact fees. Those estimates decline by roughly a third under the revised plan, though the land purchase price is subject to negotiation.

Another element in the A&B proposal is a state requirement that 20 percent of the condos — about 125 in the revised plan — be affordable to buyers earning a little over the local median income.

Dinell estimated that prices for the affordable units would range from about $250,000 for one-bedroom units to $320,000 for two-bedroom units.

Prices for the market-priced units are projected to be higher. In A&B's initial business plan, a consultant referred to a target price range of $500,000 to $1.2 million. The business plan projected condo sales would total $680 million, or around $715,000 per unit, not excluding affordable units.

Dinell said the agency could work with A&B to impose limits on condo prices and buyer incomes to make all units affordable, but that would likely come at some expense to the state such as a subsidy or reducing the price A&B pays for the land.

Eliminating the condos, however, would make other improvements not financially viable, the agency and A&B said.

"Without the revenues that would be derived from the sales of housing units, it is not prudent to undertake the risks and expand the resources needed for the development and ownership of the dining, retail and entertainment uses, and the improvement of public facilities and amenities," A&B said in its plan.

Some observers believe that the controversy over selling some state land to revitalize the surrounding area for public use will doom the development effort. Others urge the state to follow through with the project after decades of costly planning.

There is also the belief that because so many people have divergent ideas as to the best use of the peninsula, coordinated redevelopment efforts will give way to piecemeal reuse of the property that may take decades longer to occur.

"You can't please everybody," said longtime local commercial real estate broker Steve Sofos. Everybody's second-guessing now. What are you going to do — leave Kaka'ako looking as a slum for the next 20 years?"