A document submitted by transit officials to the City Council in July indicates the Honolulu rail authority plans to buy First Hawaiian Bank property worth more than $5.7 million, but city officials now say the document is incorrect and outdated.
Any plan by the Honolulu Authority for Rapid Transportation to buy bank property would raise potential conflict-of-interest issues because current and former First Hawaiian Bank executives are overseeing development of the publicly funded rail project.
Jeanne Mariani-Belding, public information officer for HART, acknowledged the rail property acquisition list submitted to the City Council on July 26 includes a notation that the city intends to make a "full acquisition" of a 1.28-acre First Hawaiian Bank parcel near the bank’s operations center in Kalihi.
That property is being used as a landscaped parking lot for First Hawaiian employees and is valued for tax purposes at $5.72 million.
But Mariani-Belding said that the list submitted to the City Council was based on an outdated acquisition list prepared in about 2008 for the rail project’s final environmental impact statement.
Mariani-Belding and HART Finance Committee Chairman Don Horner said Thursday the city had modified its acquisition plans since that list was compiled, and the city was actually considering buying only a fraction of the First Hawaiian property — up to 10,000 square feet.
Mariani-Belding on Friday amended the city’s statement on the bank property, saying that "current design plans do not call for acquiring the First Hawaiian property at this time."
Horner said the bank was notified about two years ago "that HART may need to acquire something less than 10,000 square feet on the edge of a bank parking lot in Kalihi for a small power station."
Bank officials "will probably do our best to avoid that, but if it is, it is," he said.
"The bank would prefer not to have our land be acquired. Like all landowners, that is not something that we look forward to," Horner said. "However, if it is in the best interest of the project, then we would certainly consider it."
Horner is chairman of the HART Finance Committee, which puts him in a pivotal position overseeing development of the rail project. He is also a retired chief executive officer of First Hawaiian Bank and is chairman of the bank’s board of directors.
The chairman of the HART board is Carrie Okinaga, an attorney who is also general counsel for First Hawaiian Bank.
The $5.26 billion rail project is the largest public works project in Hawaii history, and the city expects to buy outright 38 properties along the rail route. The city will buy portions of another 133 properties and will obtain easements to allow the city to use or access another 13 parcels.
Those property acquisitions for the rail line will require relocation of 26 households and 66 businesses, according to a recent federal report on the city’s real estate acquisition efforts.
The HART budget for property purchases and relocations is $222.2 million.
Horner said First Hawaiian Bank has not been contacted by HART about the Kalihi property "for quite a few months."
Mariani-Belding said the city did archaeological inventory survey site work for rail last October on the First Hawaiian property, and the bank granted the city access to the land to conduct that survey.
Archaeological survey work is required on property the city may need to develop for the rail project to investigate the possibility that there may be burials or other cultural artifacts.
The decision on whether the city would buy part of the bank property "was to depend on final design engineering which has not been completed for phase two of the project," Horner said in a written statement.
Mariani-Belding agreed Thursday. "They cannot make a decision on that parcel until the final design is pau, until that section is somewhat complete, so they don’t know if they will need that parcel at all," she said. "No letter of intent was sent, nothing was initiated on that parcel."
Mariani-Belding amended that statement Friday to say that "while the final determination on whether that parcel will be needed cannot be made until the design work is completed, current design plans do not call for acquiring the First Hawaiian property at this time."
Horner said he has not lobbied HART officials to try to persuade the city to avoid the bank property.
On the other hand, if the city later decides it will buy part of the bank property, by law the HART board would not be involved in that decision, which would be made by professional city engineering staffers, Horner said.
If the issue were ever presented to the HART board for any reason, "then obviously Carrie and myself would recuse ourselves from having any impacts on the bank," Horner said. "We certainly would not vote."
