Aloha Stadium redevelopment ‘superpower’ bill advances with concerns

Two Hawaii Senate committees quickly advanced a bill promising to supercharge Aloha Stadium redevelopment work Friday after the bill’s first public hearing.

Yet two state agencies have raised concerns about the measure.

Sen. Lorraine Inouye, chairwoman of the Water and Land Committee, called Senate Bill 1423 the most important bill of this year’s legislative session, and joked that it was also the most important bill of the century.

Curt Otaguro, head of the state Department of Accounting and General Serv­ices, which helped draft the measure, said the state’s effort to redevelop the 98-acre stadium site in Halawa with a private partner has been in the works 15 years and needs help from the bill to meet a goal to deliver a new stadium by late 2023.

“We’re at a critical point to move forward,” he said.

Leaders of two other agencies, however, raised concerns with SB 1423, which would give “superpowers” to the Stadium Authority, an agency that manages Aloha Stadium.

These powers would include a special fund, ownership of the land and — most important — broad redevelopment and procurement tools belonging to a sister agency to which the Stadium Authority would become attached.

This would-be sister agency, the Hawaii Community Development Authority, said the bill assigns stadium project fiduciary duties to HCDA without oversight and requires HCDA’s executive director to serve under the Stadium Authority with regard to Halawa matters without accountability to HCDA’s board of directors.

“HCDA’s role is not clear,” Deepak Neupane, the agency’s director, said in written testimony.

The Stadium Authority calls the bill essential.

“We believe this comprehensive product provides the impetus required to bring the stadium development district project to fruition and clarifies roles and responsibilities of all parties involved while fostering a collaborative process and platform on which to move forward,” Scott Chan, the agency’s manager, said in written testimony.

The state Department of Budget and Finance said it has concerns about a special fund because such funds should financially self-sustain their associated programs, while it’s unclear whether that would be the case with the stadium project.

The Legislature has provided $350 million to help with the project, in which a developer would lease the state-owned site and build a new stadium along with complementary commercial and residential uses.

Much of the state’s contribution is envisioned to go toward infrastructure needed to support development surrounding a new stadium, and a developer is expected to finance and operate the new stadium.

DAGS has largely led the redevelopment effort to date with a paid team of private consultants that have outlined a broad project scope and selected three qualified developers to respond to a request for proposals that has not yet been issued.

This work was upset last year when the Legislature failed to pass a bill to have the Stadium Authority replace HCDA heading up procurement work after lawmakers selected HCDA for the job in 2019.

Sen. Glenn Wakai, who helped draft SB 1423 and described it as delivering superpowers to the Stadium Authority, previously said, “If this bill passes, you’re going to be able to move the process along quicker than if you were any other government agency.”

Wakai is chairman of the Senate Committee on Energy, Economic Development and Tourism, which advanced the bill Friday unanimously with Water and Land Committee members.

In the state House, Rep. Aaron Ling Johanson, whose district includes the stadium, has endorsed the bill along with an identical companion he introduced in the House.

“We’re utilizing HCDA’s developing powers and their expertise, which is the way it should be, but the governing authority as established (by the bill) would end up being the Stadium Authority,” he said Friday on the Honolulu Star-Advertiser’s Spotlight Hawaii livestream program on Facebook.

“We’re getting really the best of both worlds here: the expertise and the ability to develop property, but also with a governance structure that takes into account the special needs of the stadium and this area.”

Rep. Sylvia Luke, chairwoman of the House Finance Committee, expressed a different view on the Spotlight program Friday.

“The HCDA is the best option,” she said.

Luke also said it’s urgent to move the project forward, given that the state’s $350 million has already been borrowed by selling bonds.

“Anytime there’s a delay, it will be especially wasting taxpayers’ money.”

Another pressing factor to advance the project involves the stadium’s biggest user, the University of Hawaii’s football program, which has called Aloha Stadium home since the facility opened in 1975.

In December the Stadium Authority informed UH that using the stadium won’t be viable until a replacement is built, partly because stadium revenue has plummeted due to COVID-19 and can’t support expenses. Also, a developer is expected to demolish the stadium next year instead of waiting until a new stadium is built on an adjacent area.

The December move has forced UH to hastily make plans to improve its Clarence T.C. Ching Athletic Complex practice facility on campus in Manoa at an estimated cost of $6 million to play football games for at least three years.

UH said it supports SB 1423 but suggested that the bill be amended to make two existing nonvoting members on the Stadium Authority’s board — the UH president and state schools superintendent — voting members.