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The Honolulu Advertiser
Posted on: Monday, March 1, 2010

City's sights on Kapolei

By Gordon Y.K. Pang
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Mayor Mufi Hannemann

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The city would get 34 acres of prime land in Kapolei in exchange for building a key, milelong section of Kapolei Parkway that has been the responsibility of Kapolei Property Development.

If it goes through, the deal would make the city a key player in the development of the core of downtown Kapolei because it would have the authority to decide who and what gets built there.

A memorandum of agreement has already been drafted and signed by KPD officials. Mayor Mufi Hannemann will sign it assuming the City Council approves accepting the parcels the city would obtain in the deal.

Factoring the value of the land to be received and the cost of constructing the road, the city would net an estimated "positive benefit" of $24.1 million, according to city documents.

The plan was mentioned by Mayor Mufi Hannemann during his State of the City speech last week and is outlined in a resolution calling for the City Council to approve the takeover of the parcels.

Hannemann said the city would be able to speed up the construction of the critical roadway with the help of federal dollars while entering public-private partnerships on the properties it receives in the deal.

The road is both a significant improvement for the area's motorists and a crucial component in the development of the fledgling Kapolei.

For KPD, the deal means it can shed the responsibility of building that section of the road as it is required to do as a condition of land use approvals it received to develop portions of the region.

Kapolei Property Development is the successor company to the Estate of James Campbell and the master planner for the region.

Resolution 10-49 will be before the Council Budget Committee at its meeting at 9 a.m. Wednesday.

The city would have the option of selling or leasing the property. Revenues from the sale of those lands would be required to be deposited into the city transit fund, assuming the $5.5 billion rail project proceeds by 2016.

Approximately 13 of the 34 acres that would be acquired already have been designated for a mass-transit station. The other 21 acres consist of seven parcels which, like the proposed mass-transit station, are along the segment of Kapolei Parkway that the city would build.

Six of the parcels comprise the six properties between the new state judiciary building to the west, and Kunehi Street, nearly to Fort Barrette road on the east side.

The seventh parcel is the lot between Kapolei Parkway and the city's Kapolei Hale.

In addition to the 34 acres, KPD will turn over to the city 17 more acres in lands under future roadways, including the section of Kapolei Parkway to be built by the city.

The appraised value of the combined 51 acres is $60 million while the city has estimated the cost of constructing the portion of Kapolei Parkway at $35.9 million.

The city expects to obtain about $10.4 million from the federal government for the construction of Kapolei Parkway and portions of several side roads. KPD has already completed design of those roadways.

"We believe this agreement's a win for the city, for Kapolei Property Development and the community," said Theresia McMurdo, KPD's vice president of public affairs.

"It allows for Kapolei Parkway to be built, and allows for the continued development of Kapolei," McMurdo said.

Council Budget Committee chairman Nestor Garcia said the exchange could be extremely beneficial, especially if the impending rail line comes through Kapolei Parkway in the second phase of the transit project.

The first phase calls for the rail line to end in East Kapolei near the proposed campus of the University of Hawai'i-West O'ahu.

"If it is ... then those lands become candidates for transit oriented development along the rail line," Garcia said.

There's also the benefit of expediting Kapolei Parkway's extension to the Judiciary Building, which is expected to be open soon.

Garcia said he expects the administration will put in funding for the road construction when it submits its budget to the council tomorrow.

"I think it's good idea," he said.

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