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Howard Hughes Corp. to operate Kewalo Basin for 45 years

By Andrew Gomes

LAST UPDATED: 12:09 p.m. HST, Jun 27, 2014

Development firm Howard Hughes Corp. will take over operating the Kewalo Basin small boat harbor in Kakaako after a state agency approved leasing the facility to the company for up to 45 years.

The board of the Hawaii Community Development Authority, an agency regulating development in Kakaako, voted 7-0 on Friday to approve signing a lease with Hughes Corp., a Texas-based development firm that owns 60 acres mauka of the harbor including Ward Centers.

Hughes Corp. intends to carry out a plan initiated by HCDA to improve the harbor with additional slips, repairs and other features that could cost as much as $20 million.

Details of the improvement plan are subject to HCDA approval.

In return for the lease, Hughes Corp. will pay HCDA $550,000 up front and annual rent that the agency estimated might amount to $14.4 million over the first 30 years.

HCDA previously contemplated leasing the harbor to California-based marina operator Almar Management Inc. and a partner, but in February concluded that the Hughes Corp. bid was better.

Hughes Corp. said it has a bigger stake in seeing that the harbor is improved given that it plans to redevelop its private land into a new neighborhood with up to 22 residential towers, including some overlooking the harbor.

Almar has managed the harbor for HCDA since 2009. The lease with Hughes Corp. is expected to be effective Aug. 15.

HCDA began planning for harbor upgrades in 2005 when the state Department of Transportation announced it would turn over Kewalo Basin management to HCDA after letting the harbor fall into a serious state of neglect.

HCDA initially intended to make the upgrades itself, but opted to work with a private partner given government funding uncertainties, procurement bureaucracy and the financial risk of the improvements.

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