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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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MariaBetty wrote:
I wonder how much a boat slip will cost in this envisioned luxury riviera? And where will tour operators go?
on June 27,2014 | 12:36PM
Ehyu wrote:
MariaBetty, I was just thinking about that. i guess they'll use it as a selling point which i don't think they'll need. but i guess it's better than the government managing the area. I'd rather look at nice boat slips, boats and shops than the rundown stuff attracting the homeless. Another note Hughes is getting a bargain for the next 30 to 40 years.
on June 27,2014 | 01:02PM
MANDA wrote:
Say goodbye to a working harbor and hello to slips for mega-yachts and more concrete.
on June 27,2014 | 01:12PM
Maneki_Neko wrote:
It's about time that Kewalo Basin got some improvements. The piers are rotting, the place looks like 3rd world, homeless at the rest rooms and generally a dump. The waterfront areas should be the crown jewels of the City.

Hughes pays for the improvements and gets the lease to develop the area but still keep it as a harbor. The State keeps ownership and no tax money upfront. Great combo of private and public interests.

on June 27,2014 | 01:21PM
whs1966 wrote:
While Kewalo must be improved, I wonder why the rush. Were other proposals sought? What contract provisions must Hughes live up to? What are the provisions for public access? According to the article, details will be worked out later. Will this be done in open meetings or behind closed doors? (Anyone taking bets?)
on June 27,2014 | 06:52PM
Skyler wrote:
Well, there goes the status quo. No more 'little guy' slips; upper-echelon only.
on June 27,2014 | 07:47PM
harley1 wrote:
yep, clear as the mud in the Ala Wai Canal.
on June 28,2014 | 06:03AM
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