Scrapped plan for marina draws criticism

Haseko (Hawaii) Inc. announced in November that it had abandoned development of a marina in Ewa Beach at its master-planned Ocean Pointe and Hoakalei Resort communities, citing high cost and low demand. But should the developer be held to its original plan?

Some proponents of what was going to be the largest marina in the state say Haseko obtained certain approvals to build its 4,850-home residential and resort community in part because of its promise to also build the marina.

In seeking development approval, Haseko touted the value of the marina, including jobs, tax revenues, boat launch access, the possibility of a ferry terminal and improved ability to attract international boat races like the America’s Cup.

Marc James, a former Ewa Beach resident now living in Pacific Heights, said the marina was the linchpin for the project once called Ewa Marina.

"The community was willing to put up with four thousand more homes to have a marina," he said.

James and others say because Haseko obtained the key approvals two decades ago, a lot of people may not be aware of or recall that the marina represented a public objective and reward.

Tim Tucker, a longtime Ewa resident who helped Haseko gain some of its approvals in the early 1990s, is urging government officials to reject the developer’s proposal to turn the basin it dug for the marina into an enclosed recreational lagoon with sandy shores open to public use.

"Not opening the marina to the ocean will result in the loss of all the promised benefits," he said. "Haseko committed to constructing a full-service marina and maritime commercial complex."

Sharene Saito Tam, a Haseko vice president, said approvals weren’t conditioned on delivering the marina, and that pushing ahead with the plan in absence of user demand wouldn’t produce previously anticipated jobs or tax revenue. In fact, sticking with the marina plan would deter development of a hotel/time-share complex and compound the economic loss, she said.

"The last thing we wanted to do was push forward with something that’s not feasible," she said.

More than a quarter, or 28 percent, of the slips at Ko Olina Resort & Marina’s 12-year-old facility are vacant, suggesting there’s not enough demand for another marina in the area, said Saito Tam.

Expectations that opponents of a marina might still try to prevent Haseko from digging the channel with new legal challenges meant a potentially indefinite delay that is deterring hotel development, Saito Tam added.

Haseko estimates that it can complete an initial portion of the lagoon — the west end — in late 2015, and the hotel/time share by 2017.

The developer commissioned an economic impact study of its resort including the lagoon plan from local economist Paul Brewbaker. The report doesn’t quantify any economic benefit of the lagoon, but says the lagoon with an oceanfront path connecting Oneula Beach Park with White Plains Beach has a bigger public benefit than a marina because it opens the area to wider public use.

Still to some, the loss of quantified public benefits tied to the marina is a sore point.

For instance, the marina was supposed to become a major employment center for the Ewa region, and an important element reducing the number of area residents commuting to Honolulu for work.

Haseko promoted job creation and traffic reduction in a zoning application approved in 1992. The marina, the developer said, would stimulate growth in Hawaii’s boating industry and create jobs in boat maintenance, storage, marine insurance, marine surveying, yacht brokerage, sailing crews and charter operations.

A yacht club, harbor master facilities, fuel docks, cold storage and specialty stores selling marine gear such as rigging, sails and electronics also would provide job opportunities along with a harbor-front commercial center with retail shops and restaurants.

Haseko in its zoning application estimated that 1,500 jobs would be created at the maritime commercial complex.

With a lagoon, there would still be some businesses such as kayak and stand-up paddleboard rentals as well as restaurants and shops, though Haseko hasn’t estimated a new job count.

Brewbaker suggests that the difference would be marginal because there is not as much interest in boating today and a marina wouldn’t generate as many jobs as previously estimated. "That dog don’t hunt anymore," he said. "The market is not there anymore."

Jim Tibbits, a Hoakalei resident, is critical of Haseko’s assessment, saying that he has talked with 20 neighbors and none were asked about interest in slips. "No sales personnel has approached us," he said. "I’ve lived here for over two years."

Another major marina benefit was tax revenue — primarily property taxes, general excise taxes and income taxes.

Haseko in its zoning application projected several million dollars a year of additional property tax revenue for the city because of the marina. A water use permit application in 1996 projected the state would reap $11 million a year from marina-related excise and income taxes.

A benefit for Ewa boat owners would have been more convenient ocean access, according to Haseko’s environmental impact statement approved in 1991. Seven public boat ramps would have given Ewa boat owners an alternative to driving 17 miles to Waianae or 30 miles to Keehi harbors — trips that can take an hour.

More tentative or speculative were the possibilities of establishing a ferry terminal at the marina and attracting yacht races.

In its water use permit application, Haseko said inadequate marina facilities hamper efforts to host more yacht races. The company said that hotel rooms, meeting space, boat storage and maintenance facilities at Ewa Marina would make possible hosting a $1 billion event like the America’s Cup.

"Such events will generate significant revenue and publicity for not just the region, but the entire island, and the state as well," the developer said in the application.

The state historically had an interest in developing marina facilities. But because of difficulty maintaining existing facilities, the state adopted a policy encouraging private development.

The idea for a marina in Ewa Beach dates back to the mid-1950s as part of a vision driven by Campbell Estate, the former sugar plantation owner and master developer for much of the Ewa Plain including Kapolei.

City officials backed the idea, designating a marina in the area on its General Plan and Ewa Development Plan.

Colorado developer MSM & Associates proceeded with Ewa Marina in 1979 and made the marina the community’s "spine" with branching waterways and 2,500 boat slips.

MSM faltered and filed for bankruptcy in 1988. Japan-based Haseko acquired the project a year later.

Haseko endorsed the marina concept and fought hard to gain approvals. Construction began in 1997.

Excavating the marina basin provided Haseko with the benefit of using excavated rock to form foundations for homes and other parts of Ocean Pointe and Hoakalei.

Cost, however, also was an issue for the marina. After reducing the marina’s size to 120 acres and roughly 1,500 slips, Haseko projected the marina and maritime commercial center would cost $270 million, according to its 1996 water permit application.

Cost was one reason Haseko told the state Land Use Commission in 1990 that it needed to add a hotel and resort condominiums. The developer said housing development alone wouldn’t support the marina’s cost, and the LUC approved the change as part of urbanizing a second phase of the 1,100-acre project.

Around the same time, Haseko projected strong demand for slips. The developer cited a wait list of 2,360 people seeking berths or moorings at state harbors in 1994. Besides private boats, Haseko anticipated demand from commercial boats providing cruise, fishing and dive adventures.

Through the last decade or so, Haseko cut the marina’s size to between 600 and 800 slips on 54 acres. In that time, one marina was built on Oahu at Ko Olina, which added 330 slips in 2000. Today, about 90 of Ko Olina’s slips are empty.

At state harbors on Oahu, wait lists have fallen to a roughly estimated several hundred people.

Saito Tam said the cost to complete the marina isn’t really an issue. Converting the basin into a lagoon or digging an entrance channel roughly 300 feet wide, 1,500 feet long and 20 feet deep would cost about $25 million, she said.

What is unclear is whether the city or state could force Haseko to complete the marina, especially because the extent to which the marina was tied to approving Haseko’s overall project is debatable.

The city recently declared that the marina wasn’t a condition for zoning under a unilateral agreement between Haseko and the city, according to a Jan. 11 letter from David Tanoue, Department of Planning and Permitting director.

Still, the developer needs approvals for its lagoon plan, including amendments to the city’s General Plan and Ewa Development Plan, and possibly a zoning change. Also, a conditional use permit might be required, and a new or amended environmental impact statement is anticipated.