Board of Water Supply seeks bids to redevelop downtown Honolulu site

Oahu’s public water utility is making a second attempt at generating extra revenue by offering up part of its headquarters near downtown Honolulu for redevelopment, and a consultant suggests that senior housing and parking are most likely.

The Board of Water Supply expects to seek bids from private developers next year.

The initiative follows a similar endeavor in 2013 that produced just one proposal, which wasn’t accepted.

In that earlier effort the autonomous city agency made almost its whole 6.4-acre property available, including its main office building and an engineering building, with a provision that replacement space for BWS operations be provided.

Agency officials said several developers expressed interest, but ultimately only one proposal was made by neighbor The Queen’s Medical Center. Queen’s proposed developing hospital facilities including parking, but the plan was deemed an inefficient use of the utility’s land, and so it was rejected, BWS officials said.

In the new effort the agency is offering a maximum 65-year lease on around 3 acres it uses as employee and fleet parking lots.

On part of the site, BWS would like to have a new 10-story office building for its own use, including several floors for parking, to accommodate expansion needs largely connected with accelerated water system infrastructure upgrade plans.

For the remaining area a consultant hired by the agency, Avalon Development Co., suggests three most likely redevelopment scenarios: a 266-unit assisted-living facility and a 605-stall commercial parking structure, 312 rental apartments for seniors and a 605-stall commercial parking structure, or just a 1,155-stall parking structure.

All three scenarios involve 10-story structures that would fit with the property’s existing zoning for medium-density apartment use with buildings up to 100 feet. BWS officials said they are not interested in seeking a zoning change.

The agency said its primary goal for making its land available for redevelopment is to generate revenue that can help offset expenses. A second purpose is to maximize use of the property. However, the public benefit of providing senior housing also is a factor, officials said.

“The first two scenarios, the assisted-living care facility and the affordable senior rental apartments, would increase the rental housing inventory in a centrally located area (and) provide a public benefit at a reasonable cost,” Michael Matsuo, the agency’s land administrator, said Monday during a presentation of the plan to the agency’s board of directors.

Developers are invited to submit their own ideas, but BWS intends to produce its own environmental impact study based on Avalon’s analysis. If a winning proposal is significantly different from what is covered in the environmental report, either a new or supplemental report would have to be produced.

“These three scenarios are what we felt were the best for the Board of Water Supply,” Matsuo said.

A couple of board members, Jade Butay and Max Sword, wanted to know how much revenue might be earned from the projected development scenarios. Matsuo said that remains to be determined. After the meeting he said any project would have to make financial sense for the agency.

The agency expects to publish a draft environmental report in June and issue a request for development proposals later next year. Any plan selected by the agency’s board would still need City Council approval.