Editorial: Weigh carefully stadium options

It appears that after a few years of veering from one concept of stadium redevelopment to another, the state is settling on a rational middle path, one that holds potential to deliver the facility Hawaii needs, in time for the 2028 promised opening date, without asking taxpayers to bear so much risk.

There are a lot of hurdles to clear before the long-delayed replacement of Aloha Stadium is firmly on that path. Not the least of these is striking the right balance of cost containment and the incentives that will draw interest in competitive bidding.

Between now and that stage, some months from now, the executives of the consortium being assembled to carry the project have their research to do. Their mission is to properly gauge the demand for developing the stadium, along with a mix of attractions, retail and residential properties in a surrounding “entertainment district.”

And that will start in earnest with the “market sounding” virtual meeting slated for June 14, presenting the new approach to stakeholders and potential bidders. This is a needed preliminary step to map a realistic scope for the two-phased Halawa project. (Webinar registration is at nased.hawaii.gov/nased-market-sounding.)

Another challenge: The project, occupying about 98 acres of state-owned land, has been bedeviled by a lack of unified leadership, being pulled this way and that by players for the administration and the Legislature.

Should the components include housing, and if so, how much? Should the developers get the green light to start with the commercial-retail portion, or should the state push ahead with the stadium first? And who is in charge of this, anyway?

At a May 25 meeting of the Stadium Authority, the governor’s new approach became clearer and, fortunately, the emphasis is placed where it belongs, on building the stadium first. That makes sense, given that $400 million already has been allocated by the Legislature and, more importantly, it’s this arena that is most in demand by the public.

Gov. Josh Green now says there will be a consortium directing the development. This would include entities such as: the Department of Business, Economic Development and Tourism; the New Aloha Stadium Entertainment District (NASED); the Stadium Authority; the University of Hawaii, which has a stake in having a professional arena for its football program; and whatever development team ultimately is selected. A major challenge will be consensus and clear direction among so many players.

On Monday, the governor appeared on the Honolulu Star-Advertiser’s “Spotlight Hawaii” webcast, laying out his own vision for the conditions under which the new stadium would be built. It was encouraging to hear him underscore the importance of the inclusion of some 4,000 housing units, “mostly affordable,” in the stadium-adjacent build-out. Given the multiple competing interests in the consortium, if Green hopes to realize this reasonable housing target, he is going to have to see that the vision is carried through. The public will expect nothing less from a governor who promised to make headway on housing.

NASED previously had pursued a design-build-finance-maintain model for the project, which ultimately was split into the stadium and entertainment-district contracts to be awarded separately. Last fall, then-Gov. David Ige stopped that process and aimed to move ahead with only a contract for the stadium, leaving the development of the surrounding acreage for an undefined future phase.

One problem: After crunching the numbers, Green projected what the state’s appropriated funding would cover, and it was, in a word, dismaying. Replacing the deteriorated 50,000-seat stadium would be a poor substitute, according to a 2022 assessment: It would accommodate 25,000 spectators sitting on bleachers, and with no roof.

Just about everyone with any interest in the stadium finds that flatly unacceptable. Smaller than 50,000 would be appropriate, but who would attend any game or concert in such discomfort?

So to persuade a developer to construct a suitable replacement stadium, expect the price will rise. And if leaders don’t want excess costs falling on the taxpayers — and they shouldn’t — the state simply has to sweeten the pot.

The current plan would stick with a single developer, but one awarded a design-build-operate-maintain contract encompassing the stadium, using the state funds, as well as the entertainment district. There would be more lucrative incentives in the operation and the wider development prospects, Green said, and it could save taxpayers millions in financing costs.

The governor sees hope for ways to supplement the financing sources. One would be naming rights, which he said could yield an estimated $30 million to $40 million. Another pursuit he cited, perhaps even more fruitful, is a partnership with the military to offset infrastructure costs.

At this point, let’s opt to adopt the governor’s hopeful stance — with eyes wide open. Evaluating all options carefully is the only route to a new Aloha Stadium the community can welcome with pride.