David Shapiro: Honolulu taxpayers face big hit on Kakaako rail easements

The Honolulu Authority for Rapid Transportation is set to pay millions more in legal costs to obtain 2 acres of Kakaako rail easements from the Howard Hughes Corp. than it originally expected to pay for the property itself.

It’s another sign this project is hopelessly out of control and more reason for HART to abort the Hughes eminent domain lawsuit, pause spending on rail’s troubled final leg through Kakaako to Ala Moana Center, and focus on identifying a workable and affordable interim rail terminus around Middle Street or downtown Honolulu.

The city originally deposited $13.5 million reflecting its expected cost of the Hughes property when it began condemnation and budgeted $4.5 million for legal costs.

Last week, after several previous legal fee increases, HART’s board approved $7 million more, bringing the total to $23.3 million paid to two law firms, Starn O’Toole Marcus & Fisher and Nossaman LLP.

HART’s report to the board said it expected Hughes “will seek over $200 million from the taxpayers” in a trial scheduled to begin in May. This is well more than the $190 million the city initially expected to pay for all property acquisitions along the entire 20-mile rail line from Kapolei to Ala Moana.

It would be an outrageous windfall for Hughes, whose property values have benefited from the rail route going through its development, and a cruel burden on Oahu taxpayers, who have already seen projected rail costs soar from $5 billion to $12.5 billion, with a current estimated deficit of $3.5 billion.

Given that the leg to Ala Moana is at least 10 years and many billions away from being built under HART’s projections, $200 million risked for Hughes easements that might never be used would be better spent optimizing whatever interim terminus is selected to provide the best possible service to long-suffering commuters.

We’ve had less than reasonable cooperation from major Kakaako and Ala Moana landowners after their property values were enhanced by the city’s much-disputed decision to route rail their way.

In addition to the Hughes demands, Brookfield Property Partners has sought skyscraper-level height variances for virtually all of its Ala Moana Center in exchange for a right-of-way for the train to continue on to the University of Hawaii in the future.

With funding short and rail stalled far from Ala Moana for years to come, the city must make a fresh decision on whether to stick to that route, skip the Kakaako and Ala Moana headaches and revert to original plans to go from downtown to UH along Beretania Street, or just stop rail downtown to connect with augmented buses and shuttles.

In deciding, it’s fair to consider the willingness of benefiting landowners to cooperate.

And as seems the case with the Hughes property, we must know when to walk away from a bad deal instead of playing patsy for out-of-state corporations seeking exorbitant profits for their shareholders at the expense of tapped-out local taxpayers.

Reach David Shapiro at volcanicash@gmail.com.