Several state agencies in Hawaii have statutory power to engage in public-private partnerships, and results often haven’t been what was expected.

Pursuers of P3 projects include the University of Hawaii, the Hawaii Public Housing Authority, the Aloha Tower Development Corp., the Department of Land and Natural Resources, the Hawaii Housing Finance and Development Corp., the Department of Hawaiian Home Lands and the Hawaii Community Development Authority.

HCDA is being tapped to help facilitate a P3 deal to replace Aloha Stadium and redevelop land around the venue in Halawa, and its track record with P3s isn’t good. Other agencies haven’t fared much better, though there have been successes.

UH adopted a P3 strategy in the early 2000s to have a West Oahu campus built in Kapolei after more than 30 years of discussion and obstacles to state funding.

An agreement was reached in 2005 to have Texas-based development firm Hunt Cos. build an initial campus phase that would open in 2008 in return for Hunt receiving valuable adjacent land. The deal, however, got delayed, amended and ultimately fell apart in 2008 over zoning and financing issues.

In response, the state developed an initial $100 million phase of the campus that opened in 2012 and has grown since then.

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DHHL had a better, though even more drawn-out, outcome with an offer it made in 2006 to lease 67 acres of its land in Kapolei for private development of a regional shopping center that would generate land rent income to fund beneficiary programs. The agency selected a proposal by Florida-based DeBartolo Development LLC that same year and expected an initial phase would open in 2009.

DeBartolo finally signed a 65-year lease in 2014 for a $285 million initial phase of the mall named Ka Makana Ali‘i, and the first stores opened in 2016, followed by later additions.

HHFDC, an agency that primarily helps developers produce low-income housing, has had perhaps the most success with P3s. It has found developers to produce numerous rental housing projects on state land, though the agency typically provides land and the bulk of financing that make its projects much different from other P3 arrangements.

Another agency in the housing arena, the Hawaii Public Housing Authority, has historically owned public housing projects but in recent years has pursued the P3 model with mixed results.

The Housing Authority’s biggest project is a $1 billion-plus plan to transform the 68-year-old Mayor Wright public housing complex in Kalihi from a run-down collection of 365 low-income rental homes into a new community with 2,500 rental homes for mixed-income households in four towers with rooftop recreation decks, a central park, a community center, retail stores and an early childhood public school.

A team led by Hunt was tentatively selected for redeveloping Mayor Wright in 2014, with the state paying 20% of the cost. But construction never started as expected in 2019, and the Housing Authority terminated the partnership last year after clashes with the developer over design, budget and deadlines.

The falling out between Hunt and the agency followed the termination in 2017 of a separate P3 plan after six years of work to add more low-income housing to another Housing Authority project, Towers at Kuhio Park.

Renovating the former Kuhio Park Terrace towers was the Housing Authority’s first P3 project, and this was completed in 2012 by two mainland affordable-housing development firms, The Michaels Organization and Vitus Group.

Michaels was to build 450 new homes on the site in a second phase, but the work was derailed by what the Housing Authority described as an impasse in negotiations, while the developer claimed the agency tried to change the agreement.

A third Housing Authority P3 project is pending and would produce an estimated $373 million affordable-housing tower complex with 800 rental apartments for seniors at the agency’s administrative headquarters site in the Kalihi-Palama area.

The Housing Authority selected a proposal by the California-based nonprofit Retirement Housing Foundation in 2016 and signed a development agreement in 2019. Starting construction this year is subject to a combination of public and private financing.

Financing public works projects can be challenging for the state, but private developers present financing risks that can kill P3 projects.

A good example of this was an effort by DLNR to upgrade old boat fueling, haul-out and repair facilities at the Ala Wai Small Boat Harbor in 2009.

DLNR picked Honey Bee USA Inc. to make boating facility improvements at the state’s largest recreational harbor while adding two wedding chapels, shops and restaurants under a 55-year land lease that would earn the state annual revenue starting at $564,000 and rising above $1 million.

Honey Bee defaulted on rent and a new DLNR attempt to seek P3 proposals in 2019 failed.

At Honolulu Harbor, the financial failure of a developer led to a much bigger P3 debacle.

The Aloha Tower Development Corp. offered up 13 acres of waterfront property in 1983 and selected a plan by Aloha Tower Associates calling for a festival marketplace, two condo towers, a hotel and an office tower.

The developer completed the $95 million Aloha Tower Marketplace with retail and restaurants in 1994, but financial trouble nixed other pieces, including underground parking that was key to the marketplace’s viability.

Aloha Tower Development Corp. sought new P3 proposals in 2002 to realize more of the original vision, and four years later picked a plan by Texas developer Ken Hughes that included a 300-unit residential, hotel and timeshare complex plus retail and restaurant space and a pedestrian promenade around the water’s edge of what is now largely a parking lot Diamond Head of the marketplace.

But the agency and Hughes couldn’t agree on lease rent or a solution to the marketplace parking shortage, and in 2009 an arbitrator awarded Hughes $1.6 million, which the state challenged in federal court and lost.

More recently, the marketplace was largely converted for use by Hawaii Pacific University.