Opponents of the Honolulu Rail Project are criticizing city officials for starting construction this past summer on land that the city did not own. According to rail documents which were made public, there were two sites in Waipahu and Kapolei where crews started putting in guideway columns and grading land in an effort to keep the rail project on time and on budget. However, while the city intended to acquire both properties at a later date, they did not own the land at the time of construction. City officials argued that this is a “standard practice for larger parcels where we gain a legal right of entry pending closing on the sale.” Officials also noted, “On a project of this size it is critical to keep things moving so that we are on time and on budget.”
Currently, the city has stopped all construction after the Hawaii Supreme Court had ruled that an archaeological survey of the entire 20-mile route was needed before construction could resume. It is estimated that this delay, which could last eight to ten months, will cost tax payers $7 million to $10 million per month.
Kawaiaha’o is the oldest church in the state of Hawaii and the final resting place of many of Hawaii’s royalty. Several years ago, church officials decided to do a series of major renovations on their property, which required moving over 600 burials to a new location. This upset many Native Hawaiians who did not want the remains disturbed. However, the church, working in conjunction with the State Historic Preservation Division, went ahead with the project.
In a recent development, the Hawaii Intermediate Court of Appeals has granted an injunction which prevents Kawaiaha’o Church from doing any additional work at this time. The panel of three judges stated that their is substantial likelihood that the State Historic Preservation Division violated its own policy by providing approval for the project without a proper archaeological survey. This is a similar statement to the ruling that the Hawaii Supreme Court made against the SHPD in the Honolulu Rail Project case.
According to ABC, the new television show “Last Resort” was seen by over 9 million viewers in its series premier last week. The basic premise of the show is that a U.S. nuclear submarine comes under attack by their own government and they decide to take over a small island in the Indian Ocean and declare themselves the world’s newest nuclear power. The majority of the show is shot in Hawaii and would be the third major series that ABC has filmed in the islands.
On August 24, 2012, the Honolulu Supreme Court ruled that the State Historic Preservation Division violated their own rules when they allowed rail construction to begin without the city of Honolulu completing an archaeological survey of the entire route. This halted all construction of the project and city officials are now working 7 days a week to complete the archaeological survey work. However, it is expected that this will delay the project by eight to ten months with an estimated cost of $7 to $10 million per month. City attorneys appealed to Hawaii Supreme Court to reconsider their ruling, but the request has been denied and the decision upheld.
Former Governor Ben Cayetano is running for Mayor of Honolulu and has stated that if he is elected that he would do everything in his power to end the Honolulu Rail Project. In a recent press conference, Cayetano unveiled his alternative bus rapid transit plan. The plan, called the Flexible Affordable Smart Transportation (FAST) is estimated to cost only $1.1 billion and will use new buses and high-tech traffic signals to instantly respond to traffic problems. Furthermore, Cayetano stated that his proposal would service all the people of Honolulu, instead of just the 20-miles of Western Oahu that the rail line would help. Supporters of Cayetano are also quick to point out that this plan would be approximately 1/5 of the cost of the $5.26 billion rail transit project.
The Howard Hughes Corporation has announced that there will be some shifting around of their anchor tenants as they get ready to expand the Ward Center. Nordstrom Rack and Pier 1 will both be moving to new locations the new Ward Village Shops, which is a two-story building between T.J. Maxx and the existing Pier 1 store. Hawaii senior vice president for Howard Hughes Corporation, David Striph, stated, “The relocation sets the stage for future phases of development that will begin the transformation of Ward into a mixed-use community.
According to a report released by the U.S. Bureau of Economic Analysis, personal income for Hawaii residents increased by 1.3 percent during the second quarter of 2012. This percentage increase meant that Hawaii was the third highest state in the country behind only North and South Dakota. The state of Hawaii’s Department of Business, Economic Development and Tourism predicts that personal income will grow by 4.3 percent for the entire year.
The Kauai Visitor Bureau is expecting several hundred fans to come to their island this weekend to help celebrate the 50 year anniversary of the release of Blue Hawaii, starring Elvis Presely. Filmed on the Garden Island of Kauai, the movie helped to bring international attention to the island and greatly helped their tourism. The County of Kauai and the Kauai Visitor Bureau will host a series of events including a screening of the movie, Elvis impersonators, food, music and much more.
Blue Hawaii was Elvis Presely’s eighth movie and his largest commercial success. While some of the filming was done on the island of Oahu, the majority was shot on location in Kauai. The Public Relations Director for Elvis Presley Enterprises Inc., Kevin Kern, added, “Elvis movies were always very influential. Having an Elvis movie in Hawaii was basically an hour-and-twenty-minute advertisement. He loved to be a tourist in Hawaii and did a lot to invite people there. Elvis had a strong connection with the state. Fans are excited to celebrate Elvis in Hawaii, one of his favorite destinations. People want to see some of the locations from his films.”
According to the state of Hawaii Judiciary, only 58 new foreclosure cases were filed across the state in August 2012. This was a massive decline from the 321 new foreclosure cases filed during the same month a year ago. Experts believe that this decrease is a direct response to the new law which was enacted in June requiring lenders to be more active in working with homeowners who were behind on their mortgage payments. However, experts also note that there will probably be a slight increase in case filings once lenders adapt to the new procedures.
On October 16, 2012, the Waikiki 20/20 Conference will be held at the Hawaii Convention Center with a goal of having the public and private sectors work together to shape the community’s future over the next twenty years. Waikiki is currently the top tourist destination of the state, but it is also the most densely populated section for Hawaii residents. Event coordinators feel that it is critical that everyone living and working together in Waikiki are on the same page moving forward. President of the Waikiki Improvement Association, Rick Egged, stated, “This is an important effort that will help make Waikiki more livable and more attractive to residents and visitors for years to come. We’ve come along way since 20 years ago, and we would like to continue the discussion and re-engage the community about Waikiki’s future.”
Chairman of the Waikiki Neighborhood Board, Bob Finley, added, “Without planning you just kind of muddle along. The (Waikiki Improvement Association), the visitor industry and Waikiki residents need to have goals for the future. This is a good place to start.”
For decades the macademia nut has been one of the top income producers for Hawaii’s farmers. Recently, however, the State Department of Agriculture have been trying to get local farmers interested in also growing cashews, which they say Hawaii’s climate is well suited for. Most importantly, Department of Agriculture officials note that cashews grow on “marginal farmland” which would allow farmers to grow them at little or no expense to their other crops. Sharon
Experts note that Hawaii won’t be able to produce enough cashews to compete with countries such as India, Brazil, Vietnam, Ivory Coast and Nigeria. However, it is believed that Hawaii can produce enough premium and or organic cashews to fill a nitch market. High end cashews retail for approximately $8 per pound. It should be noted that it takes cashew trees between three to five years to become mature enough to produce the nuts.
Southwest Airlines has announced that they would like to offer service to Hawaii sometime in the near future. While airline officials have not provided an exact timetable for when this would occur, Chief Executive Officer Gary Kelly had stated previously that this could happen as early as 2014. However, travel experts do not believe that flight costs for Hawaii travels will go down very much based upon the size of planes that Southwest uses. Peter Forman, a Hawaii aviation historian, commented, “With the aircraft they’ll be using, they can be competitive in smaller markets, but in markets like Los Angeles and San Francisco, you’ll continue to see the wide bodies dominate those markets. They’re not going to be bumping anybody out of the big markets and setting fares on fire with that airplane. They’re a strong competitor, so they definitely would add seats to the market and you would see city combinations that you don’t see today.”
The Federal Transit Authority has decided to delay its decision about whether or not they will be awarding federal funds to Honolulu for the rail system. According to city officials, the FTA stated that they would like to see what happens during the November Mayor election before making a decision. Former Governor of the state of Hawaii, Ben Cayetano, is running for mayor under an “anti-rail” platform and has firmly stated that if elected he would do everything in his power to end the rail project. However, Mayor candidate Kirk Caldwell has stated that he would support rail if he were elected.
The city is expecting a total of $1.55 billion in federal funding from the Federal Transit Authority for the rail project. It was originally anticipated that the FTA would finalize an agreement by the end of October, but that is now no longer the case. Spokesman for the FTA, Brian Farber, stated, “We look forward to signing a full funding agreement by the end of the calendar year, barring any unforeseen complications.”
According to a report released by the state Department of Labor and Industrial Relations, Hawaii’s unemployment rate fell to 6.1 percent in August 2012. This was the lowest rate posted in over three years. However, experts caution that this was in part due to the fact that some job seekers are simply giving up in their searchers, creating a smaller workforce in general. Executive Director of the University of Hawaii Economic Research Organization, Carl Bonham, stated, “People who leave the labor force are no longer counted as unemployed. That’s one of the reasons you see a drop in the unemployment rate. When you see the labor force shrink by 3,850 people, that’s not a good sign.”
As a comparison, the unemployment rate for Honolulu County was 5.1 percent. Maui County had a 6.1 percent unemployment rate and Kauai County had a 7.0 percent unemployment rate. Hawaii County (Big Island of Hawaii) had the highest rate at 8.3 percent. The national unemployment rate was 8.1 percent.
Three times a year, Job Quest host a fair at the Neal Blaisdell Center in Honolulu for prospective recruiters and job seekers. During this past session, there was a record 180 employers at the fair, but a dwindling number of job seekers at approximately 4,000 to choose from. In comparison, the highest number of job seekers at a Job Quest fair was in May 2011 when over 7,000 people attended.
Executive Director of Job Quest noted that there are definitely more employers hiring, but many of the applicants lack the training of job experience to be hired. Busch stated, “People have been talking about how there are no jobs, but then people realized there are positions. Employers just can’t find qualified applicants.”
Kaiser Permanente has just completed a groundbreaking ceremony for a new medical office building and medical clinic in North Kona. Located on the corner of Queen Kaahumanu Highway and Honokohau street, the facility will be approximately 40,000 sq ft in size and have 30 examination rooms. Kaiser estimates that the new clinic will provide health care for more then 20,000 members on the Big Island of Hawaii. If everything proceeds as scheduled, the facility will be opened in the middle of 2014.
President of Kaiser Hawaii, Janet Liang, stated, “We are pleased to be expanding our services and creating a ‘medical hub’ for our members on the Big Island, particularly in Kona, where the population continues to grow and where access to health care and specialty care is a challenge. This new site in Honokohau is located on a main thoroughfare, making it convenient for current and future members, with ample parking.”
Former Governor Ben Cayetano and former city Managing Director Kirk Caldwell are spending some time regrouping and refocusing their messages prior to the final push before the November 6th general election. Kirk Caldwell has always been a strong supporter of the Honolulu Rail Project, but in wake of the recent decision by the Hawaii Supreme Court to halt the project until an archealogical survey can be completed, has tried to state that his campaign is about more the rail. Caldwell noted, “While rail transit is an important issue, this election is about so much more. It’s about public safety and protecting our people and their property, providing transportation to get people to and from work, TheHandi-Van and services for the elderly, filling potholes and repaving our roads, stimulating our economy and properly rebuilding our infrastructure to move Honolulu comfortably into the 21st century while we maintain our current real property tax rates.”
Caldwell also downplayed the effect, if any, that the Supreme Court’s decision would have on his campaign. Caldwell added, “Right now, the issue is still in the courts so there’s not much we can do except wait. I’m optimistic that the project will get back on track. I also believe it is critical that all the proper environmental reviews are conducted fully. Simply put, the project must be done right. However, this also gives us a good opportunity to talk about all the other issues for which the mayor will be responsible. I look forward to debating Ben on these issues so that people can judge for themselves who will be best to run the city.”
Ben Cayetano has strongly opposed the rail project and has stated that if he is elected he would do everything in his power to shut down the project. Political analyst and professor emeritus of political science at the University of Hawaii, Neal Milner, believed that the Hawaii Supreme Court ruling could only help Cayetano’s campaign. Milner stated, “It gives Cayetano another talking point, for sure. It’s just another step in the direction of making people just a tad more skeptical about rail, and I’m sure that Cayetano is going to use that as another reason why rail is bad.”
Wyndham Vacation Ownership has announced that they will be acquiring Shell Vacations LLC for $102 million in cash and will assume $153 million of Shell’s debt. In return, Wyndham Vacations will receive a total of seven properties in Hawaii including the Waikiki Marina Resorts at the Ilikai on Oahu, three hotels on Kauai and three hotels on the Big Island of Hawaii. Lisa Burby, the spokeswoman for Wyndham, stated, “Hawaii is really on the top of most people’s bucket lists, so being able to expand a presence in such a highly desirable destination is an exciting time for our company. We’re just very excited for this opportunity to leverage our resources and our combined strengths.”
According to Burby, the Shell brand will still remain in Hawaii. Burby stated, “It will still be a resort for Shell Vacations in Hawaii. Employees in Hawaii will still serve in a resort management capacity. Resort names are not changing. Everything will remain as is in Hawaii.”
On August 24, 2012, the Hawaii Supreme Court ruled that the city needed to complete an archaelogical survey of the entire rail system route before construction work could resume. After discussing the matter internally, city officials announced that this delay would halt rail construction for approximately nine months and work would hopefully resume in the late spring or early summer of 2013. While executive director of the Honolulu Authority for Rapid Transportation Daniel Grabauskas has not announced how much the delay would cost taxpayers, it was previously estimated that each month of delay would be between $7 million to $10 million. So far, the city of Honolulu has already paid contractors $22 million in fees due to previous scheduling delays.
Opponents to the rail project believe that the nine months stated by city officials is extremely optimistic and point out that the city has to dig trenches on private property for their archaeological survey. Even if one of these property owners resists and fights the city in court, it could take several more months before the city could gain access to the land. Furthermore, if a burial site is found, it could take another three to six months for the Oahu Island Burial Council to decide how to best handle the remains. The Oahu Island Burial Council could either leave the remains in place, move them out of the way, or force the rail project to make changes to avoid the burial site.
The State Historic Preservation Division has announced that they have already discovered human remains in Kakaako during an archaeological survey for the Honolulu Rail Project. The bone fragments discovered are believed to be Hawaiian remains dating to pre-contact times and was discovered along with shell fragments and fire-cracked rocks. Archaeologists found the bones at a depth of 4 feet and are excavating around them to see if additional historical important items could be found.
Executive Director of the Honolulu Authority for Rapid Transportation, Daniel Grabauskas, stated, “We are working closely with the State Historic Preservation Division, the Oahu Island Burial Council and other stakeholders to ensure that iwi kupuna are treated respectfully, with great sensitivity and in accordance with state burial laws.”
According to a report released by the Hawaiian Electric Company, residential electrical rates fell on the island of Oahu during the month of September, making it the third consecutive month were rates had dropped. HECO attributed this decrease to lower fuel costs, and noted that Oahu residents were paying 33.5 cents per kilowatt-hour. In comparison, Maui Electric Company charged 34.9 cents per kilowatt-hour and residents on the Big Island of Hawaii paid 40.7 cents per kilowatt-hour. The island of Kauai had the highest rates of the state at 43.1 cents per kilowatt-hour. The U.S. Energy Information Administration noted that the national average is 12.1 cents per kilowatt-hour.
The Pacific Resource Partnership has announced that they will be hiring people to go door to door in an effort to increase support for the Honolulu Rail Project prior to the general election. The November 6th date will be critical for the Honolulu Rail Project as candidate Kirk Caldwell has stated his support while candidate Ben Cayetano has stated that he will do everything in his power if elected to terminate the project. The Honolulu Rail Project is currently in a holding pattern while the city completes an archaeological survey of the entire route to make sure that there are no native Hawaiian burials or sites of importance along the proposed path.
Island Air has announced that they will be leasing five additional ATR 42 turboprop airplanes to help expand their fleet. According to their press release, Island Air hopes to replace its entire fleet with new planes. Chief Executive Officer Lesley Kaneshiro stated, “These aircraft represent an integral part of our plan to deliver on our service commitment to the ever-increasing number of guests flying with us each day. It’s a very exciting time at Island Air as we have a lot to look forward to.”
The first two 46 seat ATR 42s will join the fleet by the end of this year. The additional three will come online by the summer of 2013. Current the airline offers 350 weekly flights throughout the state and has a total of 250 employees. Kaneshiro stated that new routes will be announced shortly and additional workers will be hired.
The Hawaii Community Development Authority (HCDA) has announced that Lend Lease and the Affiliates of Forest City Enterprises Inc. have both submitted bids to build a 650 foot tower in Kakaako. The project, tentatively called 690 Pohukaina (street address) would cost approximately $500 million to construct and would contain both residential and commercial units in the building. Lend Lease has built more then 450 residential project around the United States and is currently building military housing at Hickam Airforce Base and Aliamanu Military Reservation. Forest City has done military housing construction in Hawaii including projects for the Navy and the Marine Corps. Forest City is also known for building high rise residential towers including the New York by Gehry which is the tallest residential building in the Western Hemisphere at 870 feet.
However, it is still unclear if the HCDA will be allowed to build a 650 foot tower in the first place. The current height limit is 400 feet high, and it is generally anticipated that the public and environmental interest groups will challenge the proposed height increase. If everything is approved, the Hawaii Community Development Authority believes that construction may begin as early as 2016 with a completion date in 2019.
Under the West Maui Ridge to Reef Initiative, state of Hawaii and federal government officials have agreed to work together to restore the coal reefs along Maui’s western shore. The U.S. Army Corp of Engineers will provide $2.25 million in funding while the state of Hawaii will contribute another $750,000. The Chairman for the Board of Land and Natural Resources, William J. Aila Jr., stated, “The islands and reefs are connected; what we do on land affects the reef. Healthy coral reefs are vital to our island lifestyle, economy and a thriving Native Hawaiian culture.”
Lt. Col. Thomas D. Asbery of the U.S. Army Corp of Engineers added, “Through its support of the West Maui Ridge to Reef Initiative, the corps is continuing its commitment to improving the stewardship and sustainability of Hawaii’s watersheds and nearshore habitats.”
According to Leroy Laney, professor of finance and economics at Hawaii Pacific University, Maui’s economy is strengthening faster then the other neighbor islands. Laney noted that Maui’s job market and construction sector have steadily improved along with a rebound in tourism. Laney stated, “For the past couple of years, one of the biggest underlying messages about the state economy has been the contrast between the recovering tourism sector and lagging construction. In 2012, for Maui at least, the message is changing.”
Matson Inc., the state’s largest ocean carrier, has announced that they will be increasing their fuel surcharge by 4.5 percent on October 7, 2012 due to increases in bunker fuel prices. This will mean that the fuel surcharge will rise from the current 39 percent to 43.5 percent. Matson’s Senior Vice President for Ocean Services, Dave Hoppes, stated, “While we were encouraged by the moderation of bunker fuel prices earlier this year, that trend has been reversed in recent months. Since announcing our last decrease in mid-July, bunker fuel prices have risen over 13 percent. Energy-related expenses continue to be a significant cost factor for most businesses, as well as consumers, with transportation companies especially hard hit.”
Executive Director of the Hawaii Food Industry Association, Lauren Zirbel, commented, “We’ve seen a lot of increases in costs in the form of government fees and taxes, but we also have seen a constant increase on the shipping side. Both of those things are a large part of the reason it’s so expensive to purchase groceries in Hawaii. There’s only so much that businesses can absorb. They really have no choice but to pass increased costs to the consumer because they’re already operating on a bare minimum.”
Kiewit Infrastructure has announced that they will be forced to let 30 employees go as a result of the recent Hawaii Supreme Court decision which has halted all work on the Honolulu Rail Project. According to Kiewit, the company had 250 employees working on the project, but warned that more jobs may be lost depending on how long the delay will last.
The Hawaii Supreme Court had ruled that the State Historic Preservation Division had violated their own rules by allowing the rail project to proceed prior to completing an archaeological survey along the entire route. As a result, the $5.26 billion project was put on hold. Experts believe that it will be at least several months before the survey can be finished.
According to a report released by commercial real estate firm Colliers International, a total of $942 million of commercial property was sold during the first six months of 2012. This is a huge increase from the $450 million of sales during the first six months of the 2011. The report believes that commercial sales will exceed $2 billion by the end of the year. Colliers’ report stated, “Hawaii’s outlook is brightening as market dynamics are beginning to trend into positive territory.” Despite this excellent improvement, it should be noted that this is still significantly below the $3 billion to $4 billion worth of commercial sales seen during the height of the past real estate market from 2004 to 2007.
The five largest sales in commercial real estate included:
Pearlridge Center (80 percent state) – $289.4 million Sears, Ala Moana – $250 million Avenue Shops, Safeway Center, Kapahulu – $72.2 million First Insurance Center – $71.6 million 2114 Lauula Street, Waikiki – $15.5 million
On August 24, 2012, the Hawaii Supreme Court made an unanimous decision that the State Historic Preservation Division had violated its own rules when they allowed the rail construction to begin with first completing an archaelogical survey of the entire 20-mile route. As a result the Honolulu Authority for Rapid Transportation was forced to shut down construction on the rail project until an accurate survey could be completed to determine whether or not there were any Native Hawaiian burials or other archaelogical resources in its path.
Honolulu city attorneys are requesting that the Hawaii Supreme Court reconsider their decision and are arguing that the State Historic Preservation Division did not make a “plainly erroneous” decision when they allowed construction to begin. The city has been doing the survey in sections prior to the construction work. However, the area which experts believe would be most likely to include burials are the end of the rail track near Ala Moana Center.
The delays are expected to cost the city at least $10 million per month that construction is halted.
Mokulele Airline has announced that they will be creating two daily flights between Kahului Airport and Hana Airport on the island of Maui. The flights will begin on October 1, 2012 and will take the nine seat Cessna approximately 20 minutes to complete as opposed to the two hour drive time. Rob Hansen, the CEO for Mokulele Airlines, stated, “We know there are a lot of people who drive there every day who prefer to fly. We think there’s a real market there for tourists who want to go out there but hear the horror stories about the drive so they don’t want to try it.” Hansen stated that a one-way fare would be $59.74.
Hospitality Advisors and Smith Travel Research group released a report stating that the hotel industry in the state of Hawaii set a record in July 2012. According to the report, statewide occupancy was 81.9 percent during the month of July, which was a significant increase from the 76.1 percent posted during the same month a year prior. Furthermore, the average daily rate was $214.40 which was an all time high. Revenue per available room was also an all time high of $175.59. The island of Oahu had the highest occupancy rate at 91.8 percent. Maui posted a 74.4 percent occupancy rate, while Kauai had a 75.2 percent occupancy rate. The Big Island of Hawaii had the lowest occupancy rate of 64.1 percent.
Marshall Hung, a local developer, has purchased the historic News Building in Kakaako and hopes to build two new affordable high rise condominium towers on the property. According to plans released by Hong, the two towers would each be 400 feet tall and have a combined 1,035 units with in them. Units would be sold for between $250,000 to $550,000 Fee Simple and would come in studio, one bedroom and two bedroom configurations. Monthly maintenance fees are also projected to be rather low, but the building would feature limited amenities to keep costs down.
Hung is well known in the Hawaii community and has been the developer for 1133 Waimanu Tower in Kakaako, 1448 and 1450 Young Street in Honolulu and Country Club Village in Salt Lake.
The Hawaii Community Development Authority has announced that several developers have submitted competing proposals to build a new 650 foot tall condominium tower on state land in Kakaako. The property would be located on a 2.2 acre lot and is tentatively called 690 Pohukaina, or its potential property address. The proposals would be reviewed an be open for public hearings either in December 2012 or January 2013.
Currently, there is a height limitation for buildings in Kakaako of 400 feet. However, the Hawaii Community Development Authority is considering increasing this to 650 feet to help decrease urban sprawl. However, several environmental groups have expressed their concerns and have openly opposed this plan. These groups have stated that they would fight the proposal to increase the maximum height of buildings in court, if necessary.