I think the rail project is primarily a taxpayer-funded “crony capitalist” handout to various special-interest groups who benefit financially from rail construction — including rail-adjacent private property owners, private for-profit real estate developers, realtors, construction contractors and construction labor unions. And who all provide compliant politicians with large campaign contributions and/or large numbers of votes.
So I agree with Dennis Callan’s April 16 commentary (“No extension for costly, useless Skyline,” Star-Advertiser, Island Voices) that Oahu’s rail project is a colossal waste of taxpayer money, which will be obsolete before it is completed. But Callan offers no remedy that could right this wrong and help make taxpayers whole again financially.
In contrast, local “Robin Hood” developer Peter Savio has long advocated for a simple solution that would at least recapture for taxpayers some of the unearned windfall increase in wealth that Skyline development is expected to generate for rail-adjacent private property owners directly and indirectly for the other selfish interest groups cited above.
As far back as 2016, Savio said on Hawaii News Now (HNN) that if the publicly funded rail project is benefiting private property owners, why not require them to help pay for it? Rail shouldn’t cost taxpayers anything. It should be free because landowners are going to reap the benefits, so they should be willing to pay a large percentage of the cost. Savio added that his solution would also create a revenue stream to help cover rail operational costs.
HNN also reported that a “value capture fee” is a perfectly workable solution for rail. A state statute already exists that would allow its creation, but it’s never been used, according to David Callies, who at the time was a land use and government professor at University of Hawaii-Manoa’s Richardson School of Law. This “special benefit assessment” statute permits any county to pass an ordinance to assess part or all of the cost of a public facility against landowners who specially benefit.
Callies added that California used similar legislation to build its rapid transit system. It formed assessment districts in concentric rings around the mass transit stops — and used proximity to the station to determine the fee.
HNN further reported that Ikaika Anderson, then-Zoning and Planning Committee chairman on the City Council, would introduce legislation to create a value capture fee. Anderson cited, in particular, the developers in Kakaako who will profit not just from the rail line, but from all the other taxpayer-funded improvements to infrastructure in the area. So developers need to contribute to both rail line and rail station construction costs.
So why don’t we already have a value capture fee to reimburse taxpayers?
I have mentioned this to my current City Council member more than once, and was told the Council would be looking at some form of tax increment financing, but this would not directly reimburse taxpayers.
I also told Mayor Rick Blangiardi about this at a town hall meeting last year. In response, he said Savio has some “interesting” ideas, before digressing into a vague attempt to explain how “complicated” this issue is.
I think the real reason this idea disappeared is because the special-interest groups benefiting from taxpayer-financed rail tell the politicians who represent them to kill it in the crib. But this need not be the end of the story.
If everyone who complains about being ripped off by the rail project got organized and puts the same time and energy into pressuring the mayor and Council to finally create a value capture fee, we the people might not stop the “fixed-fail project” in its tracks — but we could at least stop the financial bleeding and get part of our money back from those that rail is really intended to benefit, at our expense.
Thomas Brandt has been a foresight and public policy analyst since 1986, and is a former planning and economic development specialist for the state of Hawaii.
