Hope abides for Hawaiian center despite muddled financial history

The Hawaii Tourism Authority paid nearly $850,000 for consulting work to establish a Center for Hawaiian Music and Dance at the Hawai’i Convention Center only to find out that the state can’t afford the $98 million price tag.

State Sen. Donna Mercado Kim (D-Kapalama, Alewa, Fort Shafter), who advocated for the project when she was Senate president, said the idea was to give locals a reason to come into Waikiki and provide visitors with a cultural-based activity.

In 2007, lawmakers appropriated $80,000 for a feasibility study for the Hawaiian center. Since 2013, the Legislature has been directing HTA to set aside $1 million annually to fund operations at the future Hawaiian center, for which a budget was never set. In 2014, under former HTA President and CEO Mike McCartney, a contract for a business plan and design study was awarded to WCIT Architecture and subcontractor DTL Hawaii for more than 10 times what the Legislature had allocated.

There has been virtually no progress beyond the Hawaiian center’s expensive planning phase after more than a decade of stalls. This year’s legislative budget doesn’t provide any funding to build the Hawaiian center or to fix the Convention Center’s rooftop terrace, which because of the delay will now cost $8 million more than anticipated.

But the Senate Ways and Means Committee, chaired by Sen. Donovan Dela Cruz (D-Wahiawa,Whitmore, Mililani Mauka), did budget for the center’s $1 million operating appropriation, a stand-out item in legislation that trims HTA’s budget by more than $40 million.

Dela Cruz worked for WCIT when HTA hired the company in 2014 to do the project’s study and now is an employee and minority owner of its subcontractor DTL. But he said that he didn’t deal with the Hawaiian center’s contract or work on the project, which “a majority of WAM members support.”

According to records obtained by the Star-Advertiser, HTA selected WCIT, even though the company’s Dunn &Bradstreet Credibility Corp credit report at the time indicated that it had “a moderate to high risk of severe payment delinquency over the next 12 months.” WCIT also had “a high risk of severe financial stress such as bankruptcy over the next 12 months,” the report said.

The Office of the State Auditor noted in last month’s critical report on the tourism authority that WCIT’s subcontractor DTL “dramatically” changed the project’s scope in January 2015, and completely scrapped the public review process in lieu of a lineal descendant plan to identify ancestors of Hawaiian dancers and musicians.

The state audit noted that, “given the dramatic revision to the scope of services, the contract should have been put back out to bid rather than simply amended.” The audit also noted that HTA could not show that WCIT had submitted the lineal descendent plan. The building plans that WCIT submitted to HTA estimated the project’s cost at more than $90 million, the audit said.

A Nov. 12, 2015 email sent by former HTA Director of Cultural Affairs Kelii Wilson attempted to bring HTA President and CEO George Szigeti and former COO Randy Baldemor up to speed on the project, which was contracted before they joined the state agency.

Wilson’s email said, “WCIT did not fully deliver a product that we could use … ” and discussed the “need to counteract a possible perspective that the $ (HTA) paid for this study was a bust.”

Wilson recommended in the email that HTA pay WCIT even more money to extend its contract so it could complete a scaled-down plan.

“We really should use the same group to do this otherwise it looks like the big bucks we spent for the $98mil plan is a waste,” Wilson wrote.

Wilson’s email describes Kim’s involvement in the project, which according to Wilson included influencing the plan’s cultural portion and ordering WCIT to make two rounds of adjustments and clarifications on the project. She advised HTA that other legislators outside of Kim could start to take an interest in the project and HTA should provide them with WCIT’s report, “we don’t want this project to be a pawn (with us attached to it) in the leg tug of war.”

HTA said Szigeti and Baldemor did not respond to Wilson’s email. Wilson, who was fired from her job at HTA in January 2016, declined to comment on her past remarks.

Kim said she was no longer tourism chairwoman by the time WCIT and DTL were hired so she couldn’t comment on the study or project costs.

HTA Chairman Rick Fried said he was unaware that WCIT was in financial difficulty when HTA selected the company for the Hawaiian center’s long-range planning. Fried said the HTA board approved a contract that encompassed more than feasibility because it wanted to advance the project beyond the conception stage.

In 2015 WCIT delivered a $98 million plan that recommended construction of an energy-efficient 40,000- square-foot Hawaiian center, plus an exterior area for open-air seating with a performance stage and hula space.

Dela Cruz said he believes the Hawaiian center could be revived through a public-private partnership.

WCIT’s plan said a nonprofit board should be established to raise private dollars to cover the balance of funds needed to open and operate the Hawaiian center beyond the $1 million annual allocation established by lawmakers in 2013. So far, a board has not been established and there is less than $5 million in the Hawaiian center’s operating fund. HTA said it used some of the money to pay for the WCIT study.

Kalani Kaanaana, HTA director of Hawaiian cultural affairs, said HTA has been “trying to evaluate alternative sites that might be a better fit.”

Kaanaana said HTA is exploring moving the cultural center to Bishop Museum. He told lawmakers that the revised plan would cost about $25 million; however, Kaanaana said HTA has not conducted an additional study. HTA can’t make progress on the Hawaiian center unless lawmakers pass a new law authorizing a change of venue, he said.

Rep. Daniel Holt (D-Kalihi, Palama) proposed House Bill 2550, which directed HTA to give $1 million annually to the Bishop Museum for use in planning, designing and constructing the Hawaiian center. However, the bill wasn’t heard this session.

Kim said she is saddened that lawmakers haven’t collectively prioritized the project. She said she still thinks it has merit and said she would consider other venues.

“We want it to become a reality,” Kim said. “Sometimes you have to adjust and look at all the possibilities.”