Navy envisions major development near Pearl Harbor rail station

The Navy, as part of an ambitious public-private partnership, envisions a major development near a future rail station that includes 2.3 million square feet of low-, medium- and high-rise residential and commercial space, a high-rise hotel and pedestrian walkways over the H-1 Freeway and Kamehameha Highway connecting it all with Pearl Harbor.

“It’s exciting to see, really, the potential of this transformative project,” Capt. Darren Guenther, chief of staff for Navy Region Hawaii, said at a recent developers’ conference for the “higher-density” project.

Guenther noted that over 25,000 people stream through base gates every day, including Makalapa gate near the planned rail station on Kamehameha Highway.

The Navy wants to add housing, shopping and parks nearby, as well as improve commuting for Joint Base Pearl Harbor-Hickam service members and workers — including more than 6,000 who work in the shipyard, the state’s largest industrial employer.

“The Navy recognizes the tremendous win-win opportunity we have here on Oahu to create value and to address transportation challenges for both the public and private sectors through a development that will draw new residents, businesses, and visitors, and become a community asset,” Capt. Marc Delao, commander of Naval Facilities Engineering Command Hawaii, said in a release.

The ongoing effort also speaks to the commercial gravity of the Honolulu Authority for Rapid Transportation’s 21 planned rail stations and its mixed-use “transit-oriented development” — as well as the fact that big business can and is being conducted during the COVID-19 disaster.

Some 78 individuals representing multiple companies participated March 18 in a Department of the Navy developers’ conference webinar — “signaling strong interest in the public-private partnership proposal to reimagine approximately 70 acres of land adjacent to Joint Base Pearl Harbor-Hickam,” Naval Facilities Hawaii said.

Of that total, 64 participated virtually and 14 were present for the conference while “strictly adhering” to social distancing measures, the Navy said.

The nearby Halawa/Aloha Stadium transit station “provides a unique opportunity” to leverage options for transit-oriented development with an “entertainment district” including not only the stadium but retail, residential and hotel accommodations, a state report said in August.

The “underutilized” Navy sites proposed for redevelopment include the 13-acre Little Makalapa parcel adjacent to the planned rail station across from Pearl Harbor, and a nearby 57-acre Naval Facilities Hawaii site across Radford Drive from the Pearl Harbor Navy Exchange.

Now in its initial stage, the proposal is the first development opportunity from the Navy’s newly established Acquisition Modernization Office, the service said. AMO issued a request for information on Feb. 24.

The Navy would provide the land and developers would make improvements on-base. Naval Facilities Hawaii, which has a variety of old warehouses and even some World War II-Quonset huts on its 57 acres, would consolidate into a smaller footprint either where it is now or on-base. Existing buildings would be demolished.

“In-kind consideration from this lease will provide Joint Base Pearl Harbor-Hickam with infrastructure development that will close gaps in support of critical missions,” AMO Director John Kliem said in the release.

The Navy envisions a Kamehameha Highway walkway overpass, a security checkpoint and a bus depot on the base to ferry workers and military members around.

“Leveraging underutilized property is critical to support planned consolidation of shipyard industrial operations” and future shipyard improvement projects, which will increase personnel on the installation, the Navy said. The joint base “needs an integrated transit solution to reduce parking and traffic.”

Delao said third-party financing for projects is something that the Defense Department “is really looking at a lot.”

“We don’t have enough money to do everything that we need to do and so the creativity of capitalism and development represents an immense opportunity,” he said.

Real estate consultant Stephany Sofos said public-private partnerships worked with the renovation of military housing on Oahu.

“It’s been done before and it’s been very good for the military. They (developers) build it pretty fast, so that’s a positive,” she said.

Sofos said “it goes back to the whole thing that rail was never about transporting bodies — it was to try and create housing” with the ability of residents to then use rail as transportation.

The Navy’s plan for an overhead walkway from the Makalapa station “is great because it would save a lot of time and security for the military.”

Companies interested in responding to the request for information must do so by April 10. A request for proposals is expected out in August, with negotiations beginning in early 2021. The Makalapa station is expected to be operational in 2022.

“I’ll tell you one other thing,” Sofos said. “Developers drool at these situations, because you are working for the government, the military. Your payments will be on time.”