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Thursday, January 15, 2015

Update on the Honolulu Rail Project

The Honolulu Authority for Rapid Transportation, which oversees the rail project, is requesting that the Honolulu City Council allow them to borrow hundreds of millions of dollars in bonds leveraged against the city's general fund to help pay for the project.  While this had always been a part of the financial plan to build the rail project, recent news that the project faces a $500 million to $700 million budget shortfall has left City Council members uneasy if the rail project will ever be able to pay them back. Ann Kobayashi, the city Budget Chairwoman, stated, "I've been told so many things, and many of them untrue, and there's been so many changes so I just want to make sure. We're asking every taxpayer in our city and county to be co-signers of this loan."

Rail official have been reluctant to provide even a general estimate or range of how much they think the project will need to borrow over the total course of construction. Councilman Ron Menor questioned, "When can we get more specific information? What assurances or safeguards are there that the city would not eventually be put in a situation in which real property tax revenues are required to pay back the loans instead?"

The City Council plans to delay any decisions until at least February.

Source: Honolulu Star Advertiser, 1-15-2015,
Posted by Jeff Uyemura-Reyes, Principal Broker, REALTOR®
Global Executive Realty, LLC