City’s exit from rail phase equated to a ‘divorce’

Honolulu Councilman Brandon Elefante on Wednesday put the city’s withdrawal from participating in building the final 4.16 miles of the troubled rail project in the terms of a divorce.

“We’re seeing, quite frankly, like a divorce happening right in front of us,” Elefante said at a hearing of the City Council’s Budget Committee.

Elefante equated the dispute between Mayor Kirk Caldwell and Andrew Robbins, CEO and executive director of the Honolulu Authority for Rapid Transportation, over the future of the rail project to a matter of “irreconcilable differences.”

The committee met in special session and in the end decided not to formally cap the city’s limits on how much it will spend on rail going forward. Chairman Joey Manahan proposed the cap but later agreed to table his own bill.

The dispute between Caldwell and Robbins erupted in public when the city officially withdrew its participation in the so-called public-private partnership to build the final leg of the rail project.

The Budget Committee, Elefante said, was put in the position to decide whether to “cut bait and have that divorce.”

Caldwell responded, “We’re no longer there. But maybe the other partner still wants to pretend it’s there.”

Wednesday’s committee hearing represented yet another face-to-face showdown between Caldwell and Robbins over how to finance and build the rail’s final push into Ala Moana, the state’s largest transportation hub leading into Waikiki and the University of Hawaii at Manoa.

Caldwell will be out of office at the end of the year, when Robbins’ three-year-contract also expires — with little encouragement from HART’s board that he will be retained.

Robbins broke news on Wednesday before the Council Budget Committee by moving off his previously stated position that rail could wait until a new mayor and new Council members take office before deciding how to proceed, following a Dec. 31 deadline by the Federal Transit Administration to see HART’s long-awaited plans on how it intends to build and finance the final 4.16 miles of rail.

Robbins said he is in discussions with unidentified bidders to construct the final, complex segment of rail into Ala Moana and originally hoped to have more detailed information on bidders’ proposals by Thanksgiving.

Instead, Robbins said he is now hoping to get more details from bidders in the next two to three weeks on a potential public-private partnership.

“It’s going to have to be sooner than later,” Robbins told clearly skeptical Council members. “I was hoping to get to at least Thanksgiving to be able to get all of the due diligence done. … I know there’s been a lot of pressure, obviously on me and on HART, to cancel the P3, full stop, withdraw. And that would be an irrevocable cancellation of that process that we’ve been working on for two years.”

Robbins insisted he was not committed to pursuing a P3 arrangement above other options. But he said a different approach — such as a more traditional “design-­build” arrangement — would take a year or longer to negotiate and to present to federal authorities for approval.

Following the city’s September withdrawal from a public-private partnership, Manahan’s bill would have capped the city’s financial obligations at $214 million, or no more than about $26 million each fiscal year.

But following yet another second consecutive week of public airings of Caldwell’s concerns — and Robbins’ counter arguments — Council members were left to scramble in search of a compromise.

A majority of Council members on the Budget Committee ultimately decided to wait until a HART oversight committee meets today to look at the complicated issue of how to proceed.

The unanswered question is how FTA officials will respond if Robbins either does not come up with a concrete P3 agreement by the Dec. 31 deadline — FTA’s third — or pursues an alternative plan that will likely take more than a year to negotiate, as Robbins suggested.

The stakes are high, along with the future of rail.

Without the city’s support, Councilman Ron Menor asked HART Chief Financial Officer Ruth Lohr whether it would be difficult to build rail into Ala Moana, as promised.

“Absolutely, yes, if there’s a shortfall,” Lohr said.

Asked by Manahan when HART plans “to pay us back” for bonds and other financing, Lohr said: “If there’s any change in the costs at the end of the day, then of course there’s a funding gap and there would be a shortage.”

Caldwell on Wednesday repeated a threat from FTA officials that $250 million in federal funds are immediately at risk by not meeting FTA’s latest deadline to come up with a plan — in addition to millions more in federal dollars committed to the project.

In at least two separate conversations with FTA officials, Caldwell said, “they raised the issue of the $250 million lapsing and they also told me that their total $744 million could never be coming.”

“Their patience is running out and that the $806 million they’ve already provided us, they could demand that back. … And if they demand that back during a pandemic … I couldn’t even imagine how you address that issue.”

The FTA, Caldwell added later, already has committed $1.55 billion to the city’s rail project and the city should expect “not one penny more.”

Before the Budget Committee shelved Manahan’s proposal, Caldwell said the bill addressed how Robbins “deals” with HART’s relationship with the city and pointed to an ongoing problem in how Robbins interacts with critical, outside interests.

Caldwell cited the HART board’s 2019 evaluation of Robbins that referenced problems with communications and “relationships.”

When it came to external relationships, Caldwell said a HART evaluation found that Robbins “failed to meet expectations, needs improvement, improvement required.”

In 2018, Caldwell said Robbins failed to “heed” the prior year’s recommendations.

Instead, Robbins pursued “ill-conceived considered actions that he took or failed to take,” Caldwell said. “So there is a relationship problem. I do believe that.”

In response to Elefante’s analogy, Caldwell said he would not equate the city’s withdrawal from the P3 agreement to a marriage breaking apart.

“But I do think this is one project, a city project, of which we all need to communicate clearly and openly with each other,” Caldwell said.

Reflecting the uncertainty of other Council members on how to proceed, Manahan said he was concerned by Robbins’ statements that a HART plan could rely on Honolulu’s next mayor and City Council.

“I don’t know what to believe or what to rely on,” Manahan said. “I was deeply troubled by the fact that director Robbins wanted to wait until the next mayor to basically shop the project around. … I’m worried. I’m genuinely worried about where we end up.”