Relocation of workers to cost state $14M

The state will need to spend as much as $14.6 million on renovations, relocation costs and lease rent to move several hundred government workers out of a state-owned office building on Ala Moana Boulevard that has been turned over to the Office of Hawaiian Affairs.

The Army &Air Force Exchange Service building at 919 Ala Moana Blvd. was transferred to OHA in 2012 as part of a larger settlement to resolve claims by OHA for its share of the income from ceded lands dating back more than 30 years.

The state paid $17.5 million to buy the AAFES building in 1998, but OHA as the new owner is planning a redevelopment of the site that likely will involve demolishing the four-story structure.

Kamanaopono Crabbe, chief executive officer of OHA, said in a written statement he hopes OHA can strike a deal to have the state offices lease space in the building until OHA is ready to redevelop the Kakaako Makai lands, which he said will happen “through a timeline that has yet to be determined.”

However, a spokeswoman for the state Department of Accounting and General Services said OHA told the tenants they will need to clear out of the property by mid-2018.

Crabbe said OHA has launched a master planning process for the Kakaako Makai lands it now controls “to create a sustainable revenue stream to bolster our strategic plan to perpetuate our culture and to improve conditions for Native Hawaiians through our advocacy and our grants programs.”

The state surrendered the AAFES building to OHA as part of a larger 2012 transfer of about 25 acres in Kakaako Makai to OHA that were worth an estimated $200 million.

Under the state Constitution, OHA is entitled to a portion of the revenue from trust lands, but OHA alleged it was never paid its rightful share of the income generated by airports, state hospitals and public housing operations on ceded lands.

The state agreed to give the Kakaako Makai lands including the AAFES building to OHA to settle those claims for revenue that should have been paid to the agency from 1978 to 2012.

That settlement was signed into law by former Gov. Neil Abercrombie in 2012, and OHA agreed as a condition of the transfer to honor an existing agreement that allowed state Department of Public Safety and Department of Health employees to remain in their AAFES building offices rent-free until July 1.

Crabbe said the memorandum of agreement that allowed the state agencies to stay in the building also required that OHA pay $100,000 per year to DAGS to cover maintenance costs, which OHA has done.

Now that the rent-free agreement is almost finished, Gov. David Ige’s administration is moving ahead with plans to move those state departments out of the 108,000-square-foot AAFES building.

Ige this year requested $14.6 million for rent, renovations and other costs related to the move, but lawmakers trimmed that back and instead appropriated $9.82 million for the effort.

About $6.51 million of that money will be used to renovate three buildings at the Waimano Ridge site above Pearl City to provide new office space for about 260 workers from the Health Department’s Environmental Health Administration who currently work in the AAFES building.

Waimano Ridge was the site of the Waimano Training School and Hospital for people with mental disabilities, also known as Waimano Home, which closed in 1999.

The plan is to renovate three buildings there to make room for the Health Department employees, including the three-story former hospital building called Hale Ola that was originally built in 1951; the former kitchen and dining building that was built in 1949; and a former dormitory for boys called Uluapuku that was built in 1964.

Lawmakers also agreed to provide $1.58 million to the Department of Health to continue leasing space from OHA in the AAFES building while the renovations are underway at Waimano. The Waimano work is scheduled to be completed in August 2017.

About 135 employees with the state Department of Public Safety also need to move out of AAFES, but a spokeswoman for DAGS said the agency is “currently negotiating prospective lease locations,” and it isn’t clear yet where those workers will go.

The Ige administration requested $4.31 million to cover moving costs and lease rent at AAFES for public safety workers until the move is complete, but lawmakers agreed to fund only $786,000.

Other state tenants in the AAFES building include the Department of Health’s Disability and Communication Access Board and the Developmental Disabilities Council, which will both move into the Kamamalu Building at King and Richards streets downtown.

The Kamamalu building is currently undergoing a $25.3 million renovation that is expected to be complete at the end of this year.

About 220 state Department of Human Services workers will vacate leased office space downtown and move into the Kamamalu building when that project is complete, and the state has budgeted $1.257 million for that move, according to a DAGS spokeswoman.