Cargo capacity to be increased

With the release of final environmental documents, the state is moving closer to constructing a $266 million container terminal designed to handle the surge of overseas cargo expected at Hono­lulu Harbor in the next few decades.

The 94-acre Kapa­lama Container Terminal, nine years in the making, is expected to boost the amount of cargo Hono­lulu can handle by one-third and accommodate demand through 2039.

The project’s final environmental impact statement (FEIS) was released late last month and is expected to be approved in the next couple of weeks, allowing the state to launch permitting and construction with aims of completing the complex in 2016.

The state has already begun knocking down some vacant buildings at the old Kapa­lama Military Reservation site, home to a number of aging World War II-era warehouses.

Horizon Lines, which now operates in relatively cramped quarters next to Matson on Sand Island, is expected to occupy the new facility.

According to the FEIS, the project will be financed entirely by the state through revenue bonds and revenues through harbor tariffs and leases. But state Department of Transportation spokes­woman Caro­line Sluyter said the state is still looking at its financial model.

Although planning for the modern terminal began in earnest nine years ago, the need for a new container cargo facility was identified as early as 1989 in the Hono­lulu Waterfront Master Plan.

Officials said 80 percent of Hawaii’s goods are imported, and 98 percent of those come through the state’s commercial harbors. Terminal capacity at Hono­lulu Harbor hasn’t been expanded in decades.

When planning first began, the Harbors Division was predicting that Hono­lulu Harbor would start feeling the pinch on cargo capacity by 2015 and that the lack of space would begin to affect the economy by 2020.

But the Great Recession worked to reduce cargo volumes by about 15 percent from the peak in 2006, Sluyter said. After stabilizing in 2010, growth over the past few years has been disappointing, she said.

Over the long run, however, as the resident population and economy continues to grow, there should be a significant expansion in visits by container vessels, she said.

"DOT Harbors believe it is financially prudent to take advantage of this time to provide improvements that will provide for the future needs of the state," Sluyter said.

One key benefit of the Kapa­lama site, bounded on the west by Sand Island Access Road and on the north by Auiki Street, officials say, is that it will lessen the island’s vulnerability and reliance on the Sand Island Bridge. All of the current overseas cargo terminals are on Sand Island.

Perhaps the most challenging part of the Kapa­lama project has been relocating the operators now at the site. Most of the roughly 80 tenants were told back in 2011 that their leases would be ending in early 2014, and most of them have moved out.

The state is continuing to work on relocating operators who rely on their oceanfront location, including Atlantis Submarine, which is expected to move into new digs at Pier 27 by the end of the year, and Pacific Shipyards International, which is expected to move to Pier 24 or 25.

The last operator on the site may well be the University of Hawaii Marine Center, which has been given an April 1 date — with a 60-day window — to relocate from Snug Harbor, said Alexander Shor, associate dean for research.

Personnel are already working on the move, he said.

"It’s been 30 years at Snug Harbor," Shor said. "It’s like moving a house — there’s tons and tons of stuff to get rid of. We’ve been going through storage, and there are things we haven’t seen in forever. So there’s a lot of work to do."

In 1973 UH was given a 65-year lease on 16 acres of former U.S. government property at Snug Harbor. UH officials said two large research ships help make the university one of the top five ocean science institutes in the country.

According to the relocation plan, the center’s administration and deep-water operations will move to Pier 35, while the small boat operations will go to an expanded site at Hono­lulu Community College’s Marine Education Training Center on Sand Island.

UH and the Department of Transportation are still negotiating a lease agreement.

As for the overall Kapa­lama construction plan, demolition of existing structures should be completed by the end of the year, Sluyter said, followed by wharf construction and dredging to create enough draft depth and space for large vessels.

The tentative schedule is to start terminal construction in May, but the timeline is subject to approval of required permits and securing of bond financing, she said. Phase II of the project will be yard construction.

According to environmental documents, the site will include support buildings, gantry cranes and other container-handling equipment, plus a DOT Highways Division weigh station, among other facilities. The new pier will have berthing capacity for two container ships.