A commuter rail route that connects to Honolulu International Airport could spur more economic development near train stations than a Salt Lake route, according to the city's recently released draft environmental impact study.

Members of the Honolulu City Council today are scheduled to debate switching the planned $4.28 billion train route from Salt Lake to the airport in an effort to attract more riders.

One of the biggest beneficiaries of rail-related economic activity could be the state's main airport, which owns much of the land adjacent to the proposed route and near two planned airport-area stations. Honolulu's commuter train is expected to drive up land values and real estate investments around those stations, potentially generating more rent from redeveloped industrial land.

However, a slightly longer airport route comes with an added cost of about $220 million, which proponents for an airport route contend could come from federal or state coffers.

But so far, state officials have expressed no interest in helping to pay.

"I don't think the state in general has any funds," said state Transportation Director Brennon Morioka. "That was the whole intent of the (added general excise) tax. That was supposed to be the main source for revenue for both building and operating the rail system regardless of where the route went."

The state's recalcitrance is likely to be an increasingly sore point for the city, which is seeking the return of excess transit taxes now going to the state.

A half-percentage-point surcharge was added to the excise tax for O'ahu residents beginning in January 2007 to pay for the elevated rail system linking East Kapolei to Ala Moana. The state collects the tax, takes a 10 percent cut for administrative costs and gives the rest to the city. The administrative costs, however, are proving to be much lower than 10 percent and the excess — so far estimated at more than $20 million — is going into the state's general fund.

Many city officials want some of that money back. Councilman Gary Okino said the state should be more willing to help pay for an airport route.

"They should participate because they're really going to benefit from this," he said. "I can see building some commercial center within that (airport) parking structure. I can see some potential for commercial development."

The city plans to start work on the rail line in late 2009. Limited service between West Loch and Waipahu would start in late 2013, and full service to Ala Moana would begin by the end of 2018. One of the last major decisions is whether the route should go through Salt Lake or run near the airport. A commuter rail system that runs past Pearl Harbor Naval Base and the airport would cost more to build and maintain, but carry more passengers and alleviate more traffic, according to the city's draft environmental study.

The current Salt Lake route was set in March 2007 in a political compromise between rail proponents and City Councilman Romy Cachola, who supported rail only if it went through Salt Lake.

Both the airport and Salt Lake routes have a station near Aloha Stadium and a station at Middle Street. Between those two points, the Salt Lake route travels down Salt Lake Boulevard with a station at the Ala Lilikoi Street intersection. The route continues down Pukoloa Street through Mapunapuna.

The airport route runs makai from Aloha Stadium down Kamehameha Highway toward Nimitz Highway with stations near the Arizona Memorial and Pearl Harbor. At the airport, the route turns onto Aolele Street and heads diamondhead until Lagoon Drive. This route has a station in the interisland terminal/post office area and at the corner of Lagoon Drive and Aolele Street.

SINGLE LANDOWNER

Potential stations near military property at the Arizona Memorial and Pearl Harbor are considered to have no transit-related economic development potential. Closer to the airport, the increased mobility generated by rail transit could eventually spur higher-density housing and the development of mixed use, live-work-play communities, said Toru Hamayasu, chief of the city's transportation planning division.

That's because much of the industrial area around the airport stations belongs to one landowner: the state. Those properties are tied up in leases that have durations that range from 30 days to 30 years. In comparison, land surrounding the Salt Lake station is owned by a variety of private owners and includes mid- and high-rise condos, a shopping center and the Moanalua Public Library.

"When their lease is up, there's a potential (to redevelop airport land)," Hamayasu said. "On the other hand, in Salt Lake those are individual owners, so unless they decide to consolidate, it's going to be tough" to redevelop, Hamayasu added.

"With a big landowner, whether it's the state or a private land owner, it's easier to deal with," he said.

In contrast to the airport route, a Salt Lake route, which also would pass by government lands, could potentially benefit more private landowners. And unlike the airport route, one major landowner along the Salt Lake route is willing to help defray the costs.

MAPUNAPUNA PLAN

Under current plans, the proposed commuter rail will cut through Mapunapuna without stopping. However, Massachusetts-based HRPT Properties Trust has said it's willing to provide money and/or land to bring a train station to Mapunapuna, possibly at the intersection of Pukoloa and Ahua streets.

"We're willing to work with state and local government on that," said Tim Bonang, spokesman for HRPT, which is Hawai'i's largest private owner of industrial land. "It would alleviate some of the (parking) congestion and make the area more accessible to the workforce."

Placing a station in Mapunapuna would be difficult, according to the city. That's because of the engineering challenge created as the elevated track transitions from the higher Salt Lake area into the low-lying Mapunapuna area, then swings makai to connect with a station at Middle Street.

HRPT, which owns 150 acres of Mapunapuna land, said it has no plans to redevelop Mapunapuna. However, Mapunapuna, like the airport, is considered a candidate for redevelopment. Still, neither the Salt Lake nor the airport route contains ready-to-develop empty fields, so the overall economic development potential for both areas is relatively low compared with undeveloped portions of the route, such as East Kapolei.

Even if the train goes to the airport, many people will not want to live in the highly industrialized and potentially noisier area, said Peter Flachsbart, an associate professor of urban and regional planning at the University of Hawai'i-Manoa. The population-dense suburban Salt Lake-area is likely to attract more residents and riders, which could lead to more economic development than the airport area, he said.

"I think the Mapunapuna area would be a more likely candidate" for transit-oriented development, Flachsbart said. "I don't see the potential at the airport. Who wants to live there?"

Warren Luke, a partner with Loyalty Associates, which owns several mixed-use and industrial parcels near the airport, said that area is ripe for redevelopment, perhaps into mixed-use office space. However, the economic downturn could dampen such investments for the next several years. Some of the airport's land was purchased from Loyalty via condemnation proceedings, Luke said.

"A lot of those warehouses were built 50 years ago," he said. "There's land available for them to build without condemning. It makes a lot of sense, if you're expanding offices. The hard part is, if you look at your crystal ball, is now a good time to build office space?"

Potential airport developers face other hurdles including height limits and other restrictions. Buildings along the flight paths face height limits. However, projects near the airport viaduct generally are not subject to limits, said Morioka, the state transportation director.

However, the airport is required to provide preferences to tenants that have ties to aviation, Morioka said. That's because the use of airport land is governed by the Federal Aviation Administration, which helps provide funds for the acquisition, maintenance and operations of airport lands.

"If rail does go there, we would definitely take a look at what those opportunities are," Morioka said. "We would have to look at it in terms of a holistic approach through a master plan for Honolulu International Airport and then have buy-in from the FAA."

Ultimately, higher rents from airport lands could benefit residents by lowering the cost of airport activities.

"The more revenue potential that we have for our state airport system, the lower fees we're able to charge the airlines (and) rental car agencies," Morioka said. "The ultimate trickle-down effect is for consumers to have lower costs of goods."