Editorial: Pier 7 a challenge for redevelopment

The termite-ridden building that housed the former Hawaii Maritime Center has been empty for 14 years. It’s not quite as decayed as the bereft Falls of Clyde, which bobbles at its side, but throughout the years, both have continuously looked sadder and more abandoned, silently mocking former visions of the property adjacent to Aloha Tower Marketplace as a beckoning attraction for visitors.

Bishop Museum once operated the Maritime Center, but pulled out in 2009, during the Great Recession. Now, as activity on Oahu picks up again after the COVID-19 pandemic, Hawaii’s Department of Transportation (DOT) is seeking bids from private developers to take over the Pier 7 property with a 65-year land lease.

The state is right to try to improve Honolulu Harbor — but forgive us for not holding our breath. Hawaii’s performance so far in nurturing successful, vibrant enterprise at the site hasn’t built confidence.

It’s now imperative that the DOT pay close attention to pitfalls and problems that have kept new tenants away from the site, and tailor its offers carefully to attract developers who can create a longstanding and profitable operation.

There are many obstacles to overcome. One is the economy itself: Past projects have stumbled after the Japanese recession of the 1990s and the subprime mortgage crisis of 2007-2010 sent shock waves through Hawaii, leading to restricted access to financing. This year, Hawaii and the U.S. have faced a spike in inflation, along with federally imposed rising interest rates which, though meant to fight inflation, could also spark another recession and make borrowing more expensive.

The historic but decaying, iron-hulled Falls of Clyde, a 19th-century sailing ship in need of extremely expensive repairs that was left behind when Bishop Museum left Pier 7, is another dead weight. DOT must free itself — and the pier — from the rusting ship, which has proven to be a tough task; the state’s current plan is to strip the ship of its historic landmark designation and then dispose of it.

Another stubborn relic: The hulking and harbor view-blocking Hawaiian Electric (HECO) power plant facing Nimitz Highway, slated for closure since the 1980s and finally deactivated from burning oil for power in 2014, has also overstayed its welcome. Officials should negotiate with HECO to set a demolition date so that this valuable parcel can also be included in planning.

Then there’s the fact that the former Maritime Museum itself is so termite-ridden that it’s quite possibly a teardown. In 2012, when Hawaii Pacific University acquired the Aloha Tower Marketplace, HPU also had interest in leasing Pier 7 — but did not go forward, possibly because, as a harbor master plan notes, the building could be damaged past repair.

So far, only bids including condo towers have reached a funding stage, while limited and expensive parking has been a serious drag on the site’s ability to draw visitors. Even the tower marketplace, which has the stability of a long-term tenant in HPU, has been partially converted to student housing to fit school needs.

And while DOT recently issued the Pier 7 solicitation, serious concerns revolve around the Aloha Tower Development Corp. (ATDC), charged with coordinating development for the Aloha Tower area. The ATDC had not met for nearly four years until May 2021, when it regrouped to consider “unsolicited” proposals for development at the complex. Since meeting in November, it has not met again, nor has it filed a required 2022 annual report. If the state wants public confidence in its efforts to make progress with Aloha Tower, this is not how to generate it.

On the plus side, a representative of Center Art, a subsidiary of Space Needle LLC in Seattle, said the group intends to submit a proposal to lease Pier 7 from DOT. DOT’s latest terms are for $300,000-plus annual rent in the next 10 years, and a required $15 million-plus investment. Bids are due Aug. 8.

The vision of a vibrant waterfront is worthy, but success comes with execution. The state must learn from its missteps to craft a winning plan.