Kakaako redevelopment agency not ready for retirement, report says
Kakaako is filled with gleaming high-rises, hip bars, chic restaurants and more residents than ever.
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Kakaako is filled with gleaming high-rises, hip bars, chic restaurants and more residents than ever. But fostering renewal in this section of urban Honolulu is still a work in progress if you ask the state agency assigned the task 44 years ago.
The Hawaii Community Development Authority on Monday sent a report to the state Legislature concluding that it would be premature to transfer control of Kakaako redevelopment and regulation elsewhere.
HCDA was created by the Legislature in 1976 as a state agency with a governing board to improve what was then a largely near-blighted industrial area by facilitating investments in infrastructure, park space, affordable housing and commercial redevelopment.
Lawmakers last year attempted to force HCDA to transfer its duties to the city by 2023, but Gov. David Ige vetoed a bill that would have done that. As a side measure, the Legislature included a line in the state budget requiring that HCDA produce a “comprehensive transition plan and proposed legislation to transfer control” of its Kakaako development district.
It may be questionable whether HCDA’s report is a comprehensive transition plan. The agency said such a transition would need more detailed study to assess legal liabilities and to consider which state and city entities would be best suited to assume different assets and responsibilities. Appropriate timing for such transfers also would have to be determined.
“More work needs to be done to ensure the best interests of the state are included in any transfer of the (Kakaako Community Development District) to any other entity or entities,” the report said. “Much like an onion, there are layers of complexity that have developed over the 42-year (administrative) history of HCDA. Before a decision on a firm sunset date is made, these layers must be peeled back.”
HCDA’s responsibilities include controlling rules that cover zoning, affordable housing and other things, facilitating investment in infrastructure and maintaining real estate assets that include affordable-housing projects, undeveloped land and the Kewalo Basin boat harbor.
The district governed by HCDA spans roughly 600 acres mainly bounded by Punchbowl, South King and Piikoi streets mauka of Ala Moana Boulevard but also makai of Ala Moana Boulevard between Honolulu Harbor and Ala Moana Beach Park.
The agency’s report said some areas are still in need of major improvement despite $210 million in infrastructure investments by HCDA, and that transferring other things could be complicated.
For instance, central Kakaako — roughly bounded by Cooke, Halekauwila, Waimanu and Piikoi streets — is still plagued by flooding, narrow streets, haphazard parking and dilapidated road conditions, the report noted.
Queen Street is a main transportation artery passing through the area, but a half-mile stretch through central Kakaako has almost no sidewalks or storm drains while some major portions even lack space for pedestrians to walk outside the line of vehicle traffic.
“While HCDA has completed many improvement district projects, none have been completed in the Central Kakaako area,” the report said. “This has resulted in well-planned developments on the Diamond Head and Ewa ends of the district, but very little increased economic development in the middle of the district.”
The report also raised uncertainty about another entity assuming responsibility for ensuring that owners of more than 700 condominiums sold for below-market prices share appreciation of their homes upon initial resale as required under agency rules.
“There is an estimated $77 million in reserved housing equity sharing payments that may be thrust into limbo without a solid transition plan that complies with (HCDA rules and state law),” the report said.
Other issues raised in the report include who would oversee compliance with master plans for Ward Village by Howard Hughes Corp. and Our Kakaako by Kamehameha Schools.
As an example of how complicated a transfer could be, the report noted that the city needed about 18 months and $2 million to fulfill an agreement to acquire parks in Kakaako from HCDA last year.
While the Legislature has suggested that the city should assume HCDA’s role in Kakaako, the report said multiple city and state agencies will need to be part of a transfer.
The report also suggested that the city present a comprehensive plan laying out what it would accept and under what conditions.
Another suggestion in HCDA’s report is to have the Legislative Reference Bureau conduct a study this year detailing how a transfer could be implemented.
HCDA had intended to produce more of a technical study for the Legislature with help from the state Office of Planning, but that effort didn’t pan out. HCDA’s board in July approved spending $100,000 for the Office of Planning to commission a technical study on steps to transfer HCDA’s role in Kakaako to the city. However, HCDA noted in its report that procurement rules inhibited that work from timely production.
Besides Kakaako, HCDA also has regulatory oversight of three other areas: Kalaeloa, Aloha Stadium and Heeia.