A controversial plan to develop an aquarium at Ko Olina Resort & Marina using state tax credits was abandoned recently, but a similar proposal has emerged — this time for Kaka'ako.

House Speaker Calvin Say introduced a bill, modeled on the Ko Olina aquarium proposal, to provide up to $75 million in state tax credits to develop a world-class aquarium along the Kaka'ako waterfront.

House Bill 1555 is the latest in a series of initiatives dating back more than a decade to establish an aquarium in Kaka'ako. But the bill may have a tough time becoming law, given competing proposed uses for the Ko Olina credits as well as public sentiment and state development rules that have derailed several plans for the area 'ewa of the Kewalo harbor.

Say, D-20th (St. Louis Heights, Palolo Valley, Wilhelmina Rise), said he introduced the bill to resurrect the effort to build an aquarium in Kaka'ako, something that in part was derailed by a decision four years ago to provide tax credits for an aquarium at Ko Olina.

"I thought maybe we could have the aquarium back in Kaka'ako makai," Say said.

Triggering Say's move was the announcement on the opening day of the 2007 Legislature two weeks ago that the $75 million credit for a Ko Olina aquarium would not be used, Say said.

Ko Olina master developer Jeff Stone said he wouldn't use the tax credit, at the suggestion of Senate president Colleen Hanabusa, who was instrumental in establishing the credit in 2003 but said it was no longer necessary to help stimulate economic growth in the area.

COMPETING PROPOSALS

The Ko Olina credit, which is logged as an expense in the state's financial plan, is being coveted for other uses by Hanabusa and Gov. Linda Lingle.

Hanabusa, D-21st (Nanakuli, Makaha), proposes using the Ko Olina credits to help develop digital media production and hotel management programs to boost fledgling industries, middle-class jobs and economic expansion on the Leeward Coast.

Lingle has proposed that the Ko Olina credits be made available to any business that makes capital investments on the Wai'anae Coast.

Hanabusa said she prefers her own more focused approach, but also views Lingle's plan as attractive for her district.

Regarding Say's plan, Hanabusa said she has concerns because the aquarium tax credit was intended as a regional economic stimulus that she says isn't needed in Kaka'ako, where development is booming.

Under Say's bill, aquarium costs of up to $75 million spent between July 1, 2007, and June 30, 2013, could be reclaimed through state tax credits at no more than $7.5 million a year. Land acquisition costs are excluded from qualified development costs.

Another provision similar to Ko Olina's tax credit is that half of the aquarium's annual net operating income would go to the state after the aquarium has been open for 16 years.

IDEA FLOATED SINCE 1996

No specific site or developer is proposed in the bill, but the aquarium would have to be makai of Ala Moana Boulevard in Kaka'ako, an area of mostly state and private land where development is regulated by the state's Hawai'i Community Development Authority.

The area is considered by some, including former Gov. Ben Cayetano, as an ideal spot for an aquarium financed with state help. Others have criticized spending state money on a new aquarium.

Cayetano initially floated the idea to build a Kaka'ako aquarium in 1996 after an affiliate of Japanese construction firm Kajima Corp. inquired about possibly building one on state land there.

Two years later, Cayetano unveiled renderings for a $60 million aquarium with three glass buildings shaped like Diamond Head. The project was envisioned as an economic anchor for Kaka'ako waterfront development and would have replaced the Waikiki Aquarium run by the University of Hawai'i.

A feasibility study commissioned by the state projected that 750,000 people a year would visit the aquarium — enough to cover project construction, debt and operating costs. But the vision was still a tough sell, and several public and private ventures to build an aquarium at the site stalled.

PREVIOUS EFFORTS

In 2000, Cayetano sought $50 million from the Legislature to help finance the project and also led the formation of a group of local business, labor and community leaders to raise another $20 million. But the effort was scrapped in early 2001 when lawmakers cut Cayetano's budget request.

Most recently, Kajima affiliate KUD International, which has developed aquariums from California to London, made its own proposal in 2002 to build an aquarium and marine research facilities on state land in Kaka'ako.

As part of that effort, KUD sought $40 million in state revenue bonds. KUD's request passed the House and Senate separately, but Say said it died in conference committee in part because Senate leaders preferred to pass the Ko Olina tax credits.

HEARING SET

KUD vice president Larry Preble yesterday said he hadn't heard about Say's bill, but that the company is busy with other work in Kaka'ako and isn't contemplating another attempt to develop an aquarium there.

Say, who supported KUD's previous effort, said he's hopeful that his bill to help establish an aquarium in Kaka'ako will pass the House, but that he isn't as hopeful about passage in the Senate.

An initial hearing on the aquarium tax credit bill is scheduled before the House Water, Land, Ocean Resources & Hawaiian Affairs Committee at 9 a.m. Monday in House conference room 312.

Ultimately, what gets developed in Kaka'ako makai must be approved by the Hawai'i Community Development Authority, which has struggled to facilitate private development on state land there, including a plan abandoned last year by Alexander & Baldwin Inc. to build high-rise condominiums, retail space, restaurants and public facilities.

The agency plans to form a community advisory group to help decide how the area should be used.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.