HIGHLIGHTS OF JANUARY 10, 2007 HCDA MEETING

Following is a summary of actions taken and informational items presented at the January 10, 2007 meeting of the Hawaii Community Development Authority (HCDA).

Modification of View Corridor Setbacks Approved for the Keola La‘i Project

The Authority approved a modification of the Kaka‘ako Mauka Area Rules’ view corridor requirement for A&B Kakaako LLC’s Keola La‘i Project.  A&B Kakaako LLC is developing this residential/commercial high-rise complex at 600 Queen Street.  The complex will include 352 residential units (including 63 reserved units), 10,890 square feet of commercial space and 697 parking spaces.  The developer requested the modification to allow the project to have four minor inadvertent encroachments into the view corridor: one along the Queen Street view corridor on the fifth level, and three encroachments along the South Street view corridor on the fourth and fifth levels.

HCDA conducted a public hearing on A&B Kakaako LLC’s request on December 6, 2006.  In recommending that the modification be approved, HCDA staff noted that the proposed modifications will provide flexibility and result in a development that is practically and aesthetically superior to the rigid enforcement of the Rules.  The modifications will not adversely affect adjacent development or uses, and will be consistent with the intent of the Mauka Area Plan.

Extension to Exclusive Negotiations with the Office of Hawaiian Affairs for Its Proposed Headquarters and a Cultural Center on Lot 1 of the Kaka‘ako Waterfront

Authority members authorized the HCDA Executive Director to extend the agreement with the Office of Hawaiian Affairs (OHA) for exclusive negotiations until July 5, 2007 for the leasing of a lot in the Kaka‘ako Makai Area for the development of a Hawaiian Cultural Center and headquarters office complex.  OHA’s plan for the first phase is a 30,000 square foot headquarters building and a 30,000 square foot cultural center to accommodate exhibits and cultural activities on a 5.2-acre parcel adjacent to the John A. Burns School of Medicine, the Kaka‘ako Waterfront Park, and the proposed Cancer Research Center site.  On July 5, 2006, the Authority entered into a six-month exclusive negotiation period with OHA for leasing of the site. OHA requested the time extension to complete the Development and Lease Agreements with HCDA.   The estimated construction cost for the project is approximately $50 million and OHA anticipates the start of construction on the Center in early 2009.

Update on the Process to Organize an Advisory Working Group to Advise on Land Uses for the 36½-Acre Waterfront Project in the Kaka‘ako Makai Area

An informational update was given on the ongoing process to organize an Advisory Working Group to advise the Authority on land uses for the 36½-acre Waterfront Project in Kaka‘ako’s Makai Area.  HCDA is employing a process that is fair and transparent; allows for broad base public participation; and offers multiple avenues of outreach and ways for the public to participate.  In November 2006, Townscape, Inc. (Townscape) was selected as the consultant for the first phase of the process.  From early November through mid-December, Townscape conducted a total of nine small groups and individual interviews.  A brief summary of comments and issues from these meetings follow:

Comments on the Process:

• Explanation of the process seems to help people understand what is planned and why.
• Suggestion to add one or more “cross-group” interactive sessions to the process.
• Idea of serving throughout the planning and implementation process has been well-received.

Comments on the Vision and Guiding Principles:

• Access to the ocean, shoreline and open space is the dominant theme.
• Acknowledgement of the importance of the area and its impact on the entire island.
• Emphasis on local people first and then visitors is appropriate.
• Public land should be used for public purpose(s), although there is no agreement on what public purposes are appropriate for the Waterfront.
• Density and height limits in the area need to be controlled. 
• Planning should reflect the environmental features of the area and the historical uses of the area.
• Ideally, planning should include the entire Kaka‘ako Makai Area—not just the 36½ acres.
• Some income stream is necessary, but no consensus yet on the nature of income sources or amount of income needed.
• Property management, including upkeep and security, is a concern and will need to be addressed in the future.
• Affordable work force housing is needed, but a general consensus that such housing should be built in the Kaka‘ako Mauka Area, not in the Makai Area.
• Infrastructure, including roadways, parking and restrooms will be necessary.

Comments Regarding the HCDA:

• Concerns about trust, transparency and communication style.
• Concern that HCDA has significant power and how will it is used.
• Generally seen individually as “good guys”.

Townscape will continue to meet with stakeholder groups and individuals in January and February 2007, with the objective of presenting to the Authority in March 2007 its recommendation as to the composition of the Advisory Working Group and its findings based on the community outreach effort of Phase I.  During the second phase, an appropriate vision and philosophy will be established and the preferred land use for the Waterfront will be developed.

Update on the Improvement District 11 (ID-11) Queen Street Improvements Project

Although construction on the Improvement District 11 (ID-11) project was planned to start in January 2007, the project cannot proceed as planned because of an increase in the construction cost from $10,840,000 to an estimated $17,000,000 million.  The increase is due to required delays and major revisions to the construction plans required for City approval.  The current balance of HCDA’s Improvement District Revolving Fund is insufficient to fund the revised cost estimate.   As planned, ID-11 consists of the construction of roadway and infrastructure improvements on Queen Street between Ward Avenue and Kamakee Street.

HCDA staff has investigated two alternatives to address the cost overrun: either canceling the entire project or proceeding with the construction in two phases.  If the project is cancelled, public safety would still be of concern on the unimproved portion of Queen Street because there would be no sidewalks, drainage and marked parking stalls.  Constructing the improvements in two phases would constitute new projects and would require rebidding.  The phased alternative would consist of two phases, the first, the installation of traffic signals at the Kamakee/Queen Streets intersection and construction improvements in the HCDA-owned portion of Queen Street.  The second would involve construction of improvements in the remainder of Queen Street to Ward Avenue.  In both alternatives, a public hearing would be required to rescind the administrative rules that established ID-11 and its assessments.  The phased construction would require rebidding and may require public hearings.

HCDA staff is planning to meet with affected shareholders and to obtain community input before reporting back to the Authority on this matter.

Update on Consultant Selection to Provide Services for Revisions to the Mauka Area Reserved Housing Program 

Belt Collins Hawaii Ltd. was selected as the most qualified consultant by a joint Hawaii Community Development Authority (HCDA)/Hawaii Housing Finance and Development Corporation selection committee to complete the revisions to HCDA’s reserved housing rules.  The Authority’s Housing Task Force (HTF) last year recommended that the Authority’s reserved housing rules be updated.   The HTF preliminarily recommended that HCDA should focus on “gap group” or “workforce” rather than affordable housing (targeted to people earning under 80 percent of median income).  The HTF also recommended that: current buyback provisions should be retained; a preference for units over in-lieu fees should be established; incentive bonuses should be offered on a selective basis and public-private joint ventures should be pursued; and the Mauka and Makai Area Rules as it relates to reserved housing should be merged.

Under the final Scope of Work, Belt Collins Hawaii Ltd. will:  research other jurisdictions; conduct interviews with developers, Kaka‘ako residents, building managers, and selected agencies and legislative stakeholders to clarify expectations of the new rules; develop and field test alternative strategies; draft proposed rules for HCDA in-house review; participate in public hearing on rules documents; and finalize the rules document and report.  Anne Mapes, CEO of Belt Collins Hawaii Ltd., said that the firm will be meeting with stakeholders and developers to produce revised rules that “will work in the present, and building in enough flexibility that make them work into the future.”