5 Questions With… | Editorial
June 18, 2021
Development of the New Aloha Stadium Entertainment District (NASED) seems to have grown more complicated and costly, drawing unfavorable comparisons to Honolulu’s rail project. Why should the public believe in this project?
One of the hallmarks of our project is that we are taking the time up front to get the planning, scoping and budgeting as complete and accurate as possible. Although the public focus on this project began with the Act 268 (2019), it has actually been in the works for nearly two decades. Since the Legislature appropriated planning funds for this project in 2017, the technical financial diligence has increased in detail as part of the natural progression of projects, as we move from site selection and initial concepts to a defined approach. Hence, the complexity hasn’t grown — we are filling in all the natural voids that exist when an endeavor is first conceived.
We have done considerable diligence in cost planning for the stadium, driving down cost while maintaining the vision. One of the features of our procurement process for the stadium is that we will have a cost limit that must not be exceeded by bidders. Another feature is that of open discussions with each of the bidders so we may ensure before bids are due that the Request for Proposals is fair and complete to yield three solid, competitive proposals.
We strive to maintain our transparency and openness on NASED, within the confines of procurement. We are working to eliminate as many surprises and risks to the state as possible and facilitating public participation in this endeavor.
Who will drive the vision for what gets built around the new stadium? Will it include affordable housing requirements?
The state, with ongoing public input, has been developing the vision for this district for many years. This is an extension of the great work done by the City and County of Honolulu on its Halawa Area Transit-Oriented Development Plan. Our vision of a world-class and community-centric, mixed-use district has guided the project team and underpinned our decision-making. It also informs our master plan for the district. Our expectation is that the successful real estate developer will, after reviewing our master plan and its accompanying guidelines, standards and technical requirements, bring its own expertise and innovation and develop its own master plan that it believes will deliver upon the state’s and community’s vision. Of course, the state will maintain approval rights over the developer’s master plan to ensure that the developer builds out the district in a controlled manner to sufficient standards. Ultimately, we expect to maintain a long-term, collaborative partnership approach to how the vision for the district is achieved.
With the University of Hawaii expanding its on-campus facility by as many as 15,000 seats, why do we need a new stadium?
Probably the most common public misunderstanding is that this stadium is being built solely for college football. While UH is a very important user of the current facility, and we look forward to seeing UH play in a new stadium packed with the home crowd cheering them on, the new Aloha Stadium is about so much more than that. NASED will come to fruition as a new and vibrant district that promises to provide new entertainment experiences for locals and visitors in the 21st century. We are striving to expand upon the previous, broad client base by making this new asset to the community as attractive and functional as possible to a wide range of potential events and uses. Oahu is already a costly destination for touring events, so this facility has to include as many plug-and-play amenities as possible, while remaining cost-effective for both the state and event promoters. This will help ensure the facility is utilized much, much more throughout the entire year than the typical six or seven games for the UH football season, providing new consumer experiences that will also highlight and support our local, multicultural activities and heritages.
What happens if the bids for building the stadium come in significantly higher than the current $400 million estimate?
Unlike the low-bid process, bids for the stadium will comprise an overall package of costs, including not just the cost to construct the stadium but also the costs to finance and maintain it for the entirety of its useful life. This means that bidders will be competing to balance out the various cost lines to offer the most advantageous total-cost-of- ownership proposal to the state.
Part of our diligence efforts over the last year has also been to confirm that the scope we are asking for fits within the state’s budget. However, in addition to this, we also have structured a highly collaborative procurement process, which will highlight and resolve affordability issues well before bids are due.
Could the state bear additional costs (including tax breaks and other incentives) for developing the 98-acre parcel, beyond the cost of building and maintaining the stadium?
In short, yes, but only if state investment (i.e., through the provision of more state funds) will provide long-term value back to the state. NASED, both the stadium and real estate components, will be delivered via a mix of public and private funds. Private funds are beneficial in that it ensures that the developer has “skin in the game,” and balancing private funds with public funds ensures that the overall cost of development is not too high, meaning better returns to the state. Ultimately, it will be a balancing act which, of course, is done in consideration of the state funding availability.
We also recognize that while the designation of this area as an Opportunity Zone provides capital gains tax benefits for developers and businesses in the district, this benefit, in turn, creates an even greater incentive for such entities to increase their investments in district assets. This creates a very positive, mutually beneficial environment for successful, sustainable development.
Bonus question: Will there still be a swap meet?
Yes, including throughout all phases of development.
THE BIO FILE
>> Current position: Public works administrator, state Department of Accounting and General Services (DAGS); member of the New Aloha Stadium Entertainment District (NASED) team.
>> Previous employment: Hawaii Housing Authority; U.S. Air Force; Boeing Commercial Aircraft.
>> Personal background: Born in Honolulu, raised in Pearl City; Kamehameha Schools graduate; mechanical engineering degree from UH. Licensed engineer.
>> Favorite activities: Hanging out with husband of 32 years and their two sons, walking, cooking, baking, traveling, binge-watching TV.
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