State Sen. Donovan Dela Cruz wants the city’s rail system to make money, or at least break even, and is pushing for a bill that would encourage urban development and redevelopment on land around planned transit stations.
The development could provide more riders for the train system, and more riders will pay more fares, according to Dela Cruz (D, Kaena-Wahiawa-Pupukea).
The idea is that extra fare revenue could reduce or eliminate the tens of millions of dollars in taxpayer subsidies the city plans to spend each year for rail operations.
The so-called transit-oriented development plan has raised concerns among environmental groups, with dozens of people submitting testimony to lawmakers asking them to block the proposal.
The groups include Hawaii’s Thousand Friends and The Outdoor Circle, worried that Dela Cruz’s bill is creating a "fast track" approval process for some land developments near rail stations and in other areas that would limit public participation.
Mayor Peter Carlisle’s administration supports Dela Cruz’s bill, but city officials caution that the rail system isn’t likely to break even or make a profit.
The Honolulu Authority for Rapid Transportation told legislators that the city would have to reconfigure the system to expand its capacity before it could carry enough passengers to cover projected operating costs.
Even if the city added extra trains and cars to carry more people, that would then increase operating and maintenance costs, and even more riders would be needed to cover those extra costs, according to HART.
Operating and maintenance costs for rail will total $116 million in 2030, and rail fare collections are expected to cover only about 40 percent of that cost, according to the city’s financial plan for the system. Most of the rest of the operating budget will come from city subsidies.
Dela Cruz said the projected operating losses for the rail system are "unacceptable," and said he believes HART should at least attempt to make money.
"If we were to at least try for revenue generation and we fall short, OK, that’s a little different, but the expectation is to fall short," Dela Cruz said. "That’s just not acceptable to me."
His solution is Senate Bill 2927, a measure that would allow the city to create new planning districts that would operate under special rules to encourage development around the rail stations.
Dela Cruz cited statistics showing Oahu will add 130,000 residents in the next 20 years, and said directing growth to land around transit stations will help to curb urban sprawl. That will help to protect agricultural lands, he contended.
He also wants to use these development clusters around the stations to create a critical mass to encourage growth industries that the state hopes to attract, such as finance, health care or high tech.
"We talk about reversing the brain drain, we talk about diversifying the economy, we talk about focusing growth. What’s our plan?" he asked. "This bill is a huge first step in helping us achieve that."
Since the state is a major landowner along the rail line, Dela Cruz said new development could also generate income for the state "so you can lower the taxes, so you can provide services."
"We’re the biggest landowner, the state," he said. "So why aren’t we looking at it in those terms?"
The bill would allow the City or County Councils to designate "planning districts" in areas earmarked for urban development to encourage transit-oriented developments or "main street" redevelopment projects.
The bill would specifically apply to bus transit stations and rail stations planned for Kapolei, Waipahu, West Loch, Leeward Community College and University of Hawaii at West Oahu.
The City or County Councils would create rules to govern developments in the new planning districts, and developers who propose projects in them would apply to be processed as "exceptional planning projects" under the new rules.
The city Department of Planning and Permitting would have up to 55 days to process an application by a would-be "exceptional" project, and the City Council would have another 45 days to consider the application. These exceptional projects would be exempt from the normal zoning process.
Dela Cruz’s plan won support from the city permitting department as well as construction industry advocates such as the Building Industry Association of Hawaii and the Hawaii Building and Construction Trades Council AFL-CIO.
The bill ran into resistance, however, from an array of environmental groups including the Sierra Club Hawaii Chapter. The organizations contend the bill allows developers to sidestep safeguards contained in the zoning process.
The process provides a variety of opportunities for the public to weigh in on development, said Robert Harris, director of the Sierra Club. For example, under the zoning code, projects generally are presented at neighborhood boards and considered by the city Planning Commission before they are taken up by the City Council, Harris said.
Bypassing that zoning process would mean the public would have fewer opportunities to debate and comment on developments that could transform their neighborhoods, Harris said. But the community needs more time to debate some projects, particularly large ones that can change the character of an area.
"While we support the intent of sparking urban growth, this bill prioritizes the elimination of the public voice as a means to expedite growth," he told lawmakers.
Harris said the city can use the existing zoning system to guide development to the areas around the transit stations.
Dela Cruz, a former chairman of the City Council, contends the existing zoning code is "antiquated" and actually promotes urban sprawl.
Transit-oriented development could be done under the existing city zoning code, "but would it achieve all those other things that we’re trying to accomplish? Probably not," Dela Cruz said. "That doesn’t mean you can’t do TOD (transit-oriented development); you can, but it’s going to be very limiting."
Differing versions of SB 2927 have been approved by both the House and the Senate, and the bill will now go to conference committee, where lawmakers will try to work out the differences between the two drafts.
