Power struggle festers over Aloha Stadium redevelopment

Mike McCartney has held several top-level jobs in Hawaii government over three decades, but a hat he put on recently is drawing scorn from other state government officials.

McCartney, director of the state Department of Business, Economic Development and Tourism, claims that his agency is now in charge of redeveloping Aloha Stadium following more than a decade of work by the Stadium Authority, private consultants, state lawmakers and the state Department of Accounting and General Services.

The move, according to McCartney, was prescribed by the Legislature this year. But others see it as a hijacking, including lawmakers who were closely involved with the piece of legislation McCartney cites as his mandate for taking the stadium project in a new direction.

“The understanding from the Legislature is that DBEDT is a development agency,” McCartney told Stadium Authority board members at a Sept. 29 meeting. “That was a policy decision by the Legislature.”

In an interview Friday, McCartney said he plans to hire an internal special project team within DBEDT to deliver a new stadium under a simple design-build contract.

“I’m focused on how to do it faster,” he said. “This is in our court. They (lawmakers) gave us the ball, and we’re going to focus and run with it.”

Lawmakers passed a bill in May, which Gov. David Ige signed into law in June, that changed the Stadium Authority’s “administrative” attachment from DAGS to DBEDT. It is this change in Senate Bill 3334 that McCartney describes as a directive to take over the stadium replacement project.

The Legislature also included $350 million in the state budget bill this year to replace Aloha Stadium, and DAGS had long understood that this funding would help redevelop the state-owned stadium site in Halawa with a new stadium along with commercial and residential uses built by private developer partners to create a New Aloha Stadium Entertainment District community.

Lawmakers who helped spearhead the funding and the bill that reattached the Stadium Authority say McCartney and Ige are misconstruing both measures.

“That might be wishful thinking, but that’s not the law,” Sen. Donovan Dela Cruz, chair of the Senate Ways and Means Committee, said about DBEDT heading up the stadium project.

Dela Cruz, (D, Wahiawa-­Whitmore-Mililani Mauka), said reattaching the Stadium Authority was done to group state agencies involved in public-private partnership work under DBEDT as sister agencies so they can more easily work together and receive purely administrative services from DBEDT, such as accounting and human resources.

Power attachment

DBEDT perhaps is best known for conducting economic studies, compiling visitor industry statistics and producing the State of Hawaii Data Book. Among other things, the agency also promotes exports from Hawaii and investment in the state.

Before the Stadium Authority addition, 11 agencies were attached to DBEDT for administrative purposes, including the state Land Use Commission, the Hawaii Tourism Authority, the Hawaii Community Development Authority and the Hawaii Housing Finance and Development Corp.

All these agencies are independent and have governing boards. None are controlled by DBEDT, though DBEDT’s director has one board seat on some, but not all, of the agency boards.

Sen. Gilbert Keith-Agaran, (D, Waihee-Wailuku-Kahului), was the lead introducer of S.B. 3334 and said discussions pertaining to the bill’s inception centered around attaching the Stadium Authority to DBEDT as a way to better support the authority’s independence — not to give DBEDT power over redeveloping the Aloha Stadium site.

Sen. Glenn Wakai, a longtime proponent of the stadium redevelopment project and a co-sponsor of S.B. 3334, suggested that Ige and McCartney are making an illegitimate power grab.

“The move was purely administrative support,” said Wakai, (D, Kalihi-Salt Lake-­Aliamanu). “I don’t know why Mr. McCartney thinks he drives all the dealings of the Stadium Authority.”

At the Sept. 29 Stadium Authority meeting, McCartney also contended that the $350 million general obligation bond appropriation in the budget bars anyone from using the money in conjunction with a public-­private partnership, or P3, because a brief description of the appropriation covering “all project related costs” to produce a new stadium in Halawa doesn’t state that a P3 can be included.

“This is saying we can build a stadium, but it doesn’t say anything about P3,” he said at the meeting. “The Legislature passed a bill with a clear intent here.”

Randall Nishiyama, a deputy attorney general representing the Stadium Authority, disagreed with McCartney’s position in response to a question from board member Michael Yadao.

The Stadium Authority, which historically has managed Aloha Stadium, was given sole jurisdiction over stadium redevelopment, and it delegated procurement to DAGS. This delegation has not changed, and no language in S.B. 3334 forces such a transfer, according to Chris Kinimaka, public works administrator for DAGS.

Nishiyama has expressed a similar view.

After Yadao asked for more clarity over McCartney’s position on DBEDT controlling redevelopment, McCartney noted the budget appropriation is directed to his office and that he and, ultimately, the governor, are responsible for releasing such financing.

“The release of money is another kuleana,” McCartney said.

Bad blood?

Some observers of the tussle wonder privately if personal differences are at play.

Before heading DBEDT, McCartney had been Ige’s chief of staff since 2014. Before that, McCartney’s had been CEO of the Hawaii Tourism Authority, director of the state Department of Human Resources Management and a state senator from 1988 to 1998.

In 2019, Dela Cruz, Wakai and Keith-Agaran were among 11 senators who voted against confirming McCartney as DBEDT director in a 14-11 decision that approved Ige’s choice.

Wakai said at an initial confirmation hearing that McCartney lacked a vision for DBEDT, didn’t follow through on commitments, was late to meetings, communicated poorly with the Senate and was short on policy matter details.

“He really has no clear game plan as to what the business opportunities are for the state of Hawaii,” Wakai said at the hearing.

A year later, McCartney filed a complaint in the Senate against Wakai and Dela Cruz and refused to participate in a briefing for the Senate Special Committee on COVID-19 to discuss a draft economic recovery plan produced by DBEDT.

“Please know I am (and the entire DBEDT Ohana) are ready, fully committed and eager to participate in the policy making process — such as hearings — but only when I (as the Director) can be assured that DBEDT employees will no longer be subjected to bullied, harassment, intimidation and threats which have created a hostile work environment,” McCartney said in a June 4, 2020, email to Senate President Ron Kouchi.

On Friday, McCartney said no personal grievances are at issue with the stadium project, and that he respects lawmakers who have had disagreements with him on public policy.

Ige misgivings

The new contention over Aloha Stadium became public last month after Ige’s chief of staff, Linda Chu Takayama, told DAGS in an email not to proceed with its repeatedly postponed issuance of two requests for proposals seeking bids from developers to redevelop the stadium and surrounding land.

The governor has less than two months left in office, but claims the timing to shake up the project — and deliver a new stadium faster — is right given recent changes in the project’s budget appropriation, an improved economy and past delays created by lawmakers.

In 2019 when lawmakers first approved a different arrangement of $350 million in funding for the project, Ige endorsed the P3 strategy for redeveloping the stadium site.

“I think that we have realized that it is very difficult for us to just flat-out invest in a stadium facility, so we look forward to this as kind of a new venture moving forward,” he said at the time.

Four years earlier, however, Ige was against building a new stadium and encouraged long-term upkeep of the existing one.

Aloha Stadium was largely condemned at the end of 2020 by the Stadium Authority due to high maintenance costs and little revenue amid coronavirus restrictions.

Early last year, Ige again suggested it would be better to keep fixing up the 47-year-old facility instead of replacing it, even though the most recent cost-benefit analysis concluded that deferred and costly maintenance of the rusted structure would be more expensive in the long term.

Last month, Ige said on the Honolulu Star-Advertiser’s livestream “Spotlight Hawaii” program that his aim was to simplify the P3 plan instead of soliciting a low-bid contractor to design and build a new stadium.

Then in a Oct. 9 column for the Star-Advertiser, Ige wrote, “A straightforward design/build approach will be far simpler … .”

DAGS contends that another agency procuring a design-build contract for a new stadium will take more than five years to deliver the facility, compared with less than four years if DAGS continued its P3 work. DAGS also warns that features of a new stadium will have to be economized to stay within a $350 million cost.

On Wednesday, Ige said on “Spotlight Hawaii” that it would be premature for him to project a delivery timetable for a design-build stadium. He also reiterated that he is committed to following what the Legislature directed.

“We are focused on doing what the law provides, and moving that forward as quickly as possible,” he said. “I’ve directed Mike McCartney over at DBEDT that they should build the best stadium that they can for $350 million.”