Officials question state's $130 million jail plan

By Johnny Brannon
Advertiser Staff Writer

The state is set to quietly decide tomorrow whether to move forward with construction of a major new jail costing as much as $130 million, but only one development partnership has bid on the project and some lawmakers question whether the state is rushing into a bad deal.

Students from Pu'uhale Elementary School walk past the O'ahu Community Correctional Center. Kalihi residents have complained for years about OCCC's history of escapes and proximity to homes and schools. Advertiser library photo • Jan. 18, 2001

Kalihi residents have complained for years about OCCC's troubled history of escapes and its proximity to homes and schools.

Officials say the facility was poorly planned and is expensive to operate.

"It is necessary to replace OCCC because OCCC is obsolete, overcrowded, and was not designed to handle the inmate population it does today," said Gov. Ben Cayetano, who was raised in the neighborhood.

But because the state asked developers to design the project as well as build it, few details about the pending proposal will be publicly available until after the administration completes the deal.

An executive committee will decide tomorrow whether to accept the proposal, but it will not be made public until a price is negotiated and a contract is signed.

Meanwhile, the plan has raised many questions about the future of the state's criminal justice system and whether the money would be well-spent. Some lawmakers say they aren't absolutely opposed to the project but want to know more about it.

"The Legislature really had no role in this deal, and I really wish legislators and representatives of the community would have had more of an opportunity to be involved in this decision, rather than simply been informed that it is in the works," said Rep. Blake Oshiro, D-33rd ('Aiea, Halawa Heights, Red Hill).

The project would commit the state to multimillion-dollar annual lease payments for up to 30 years, or as long as the new jail is operated, and could total more than $250 million including interest.

But the plan comes as the state is starting a new approach to handling drug offenders, which has so far received little financial support.

Oshiro said he understands why OCCC is not welcome in Kalihi, but is concerned that the state has not carefully considered all the needs of the jail and prison system.

"I think there is an imbalance, and I think we need an overall, comprehensive plan when it comes to the criminal justice system," Oshiro said. "We seem to be doing things piecemeal."

Balancing priorities

Lawmakers and Cayetano this year approved a controversial statute that allows substance-abuse treatment rather than jail for nonviolent offenders who are convicted for the first time of using or possessing illegal drugs.

But the measure included no additional money to pay for the treatment, and the $2.2 million that had been budgeted for such services is expected to accommodate just 241 offenders in the next year.

Senate Judiciary Committee Chairman Brian Kanno said that is not necessarily a huge problem because the new law allows the state to bill drug offenders for the cost of their treatment.

"Treatment is important and funding is important, but in tight budgetary times, we have to balance different priorities," said Kanno, D-20th ('Ewa Beach, Makakilo, Kapolei).

OCCC has a rated capacity for 954 inmates but often holds more than 1,100. The new jail would provide space for at least 1,100 prisoners, and for up to 1,700 if the state agrees on optional additions to the base project. The new jail would also have a mental health unit for up to 40 high-security psychiatric patients.

State corrections officials say OCCC could be transformed into a secure treatment or transitional facility if the inmates there are transferred to the new jail but that no decision has been made and no written analysis of alternative uses for OCCC has been prepared.

And officials won't say whether the pending proposal for the new jail involves tearing down part of the existing Halawa prison, or whether the jail would be built adjacent to it. State guidelines for the project do not specify exactly where the jail would be built on the prison site.

"It's up to the developer to propose what they want to do," said Marian Tsuji, Department of Public Safety deputy director, who oversees the state's correctional facilities. "They can try to build it out of toothpicks if they want."

Frank Roberts, project manager for a Mainland architectural and construction management firm called Durrant, said the company had submitted a proposal to build the jail, but he would not say what firms had joined the company in its bid or to discuss other details.

Durrant has worked on prison projects in Arizona, Colorado, Pennsylvania, Texas and Wisconsin. It last year acquired Honolulu architectural firm Media Five, and the combined company first approached Cayetano in January with a proposal for the new jail.

But the administration decided to seek additional bids for the project through a request for proposals that was issued in April.

Mary Alice Evans, Department of Accounting and General Services deputy director, said only one group bid on the project but that state procurement rules don't allow officials to disclose who it was, or even what firms received copies of the request for proposals so they could consider bidding. About 110 companies asked for bid packages, she said.

The documents estimate that the project will cost up to $130 million, and they require the developer to have designed a minimum of two operating correctional facilities of comparable size, one of them within the past 10 years.

Questions of interest

Some fiscal watchdogs question whether the state is likely to get a good price, and whether the financing mechanism the project relies on, called certificates of participation, is the best approach.

Such debt instruments carry interest rates that average between 1 percent and 2 percent higher than the general obligation bonds that more commonly finance major public works projects, meaning it will likely cost taxpayers millions of extra dollars to pay off the jail.

"I think it's really curious why the state didn't get other interested parties," said Lowell Kalapa, president of the Tax Foundation of Hawai'i. "It certainly would not tend to give us the best possible bang for our buck if there's only one bidder."

Evans said the state extended the proposal deadline by one month because some potential bidders said they needed more time. Procurement law allows the state to extend the deadline further, but there is no current plan to do so, she said.

By using certificates of participation rather than bonds, the project did not have to compete with other state projects for legislative support for the limited amount of money available under the state's bonding capacity.

Kanno said he doubts lawmakers would have supported a new jail over more popular facilities, such as schools and libraries.

"In so many of our districts, schools are so badly needed, so when you have to pick between new prisons and school facilities, new schools win every time," he said.

But House Minority Floor Leader Charles Djou said he believes lawmakers understand the need to replace OCCC and would have supported the project if the administration had made its proposal more openly.

"I haven't found anything illegal, no smoking gun, but nevertheless there's a lot of smoke going on with this," said Djou, R-47th (Kahalu'u, Kane'ohe). "While there's a need to replace OCCC, that doesn't mean we should be rushing into things without planning."

Cayetano said lawmakers can always kill the project later by refusing to authorize the annual lease payments that pay off the certificates of participation.

"Anyone who believes we are circumventing the law should read the law the Legislature passed three years ago authorizing the governor to directly negotiate a contract to build a new prison," Cayetano said.

Crowding still problem

About 3,900 inmates are incarcerated in the state's correctional system, including about 1,250 that have been sent to private prisons on the Mainland to ease crowding here.

Alvin Bronstein, director emeritus of the ACLU's National Prison Project, said the new jail would do nothing to address that situation if it merely replaces OCCC, and that the state must focus more on drug treatment, job training, and restorative justice programs that make inmates face up to their crimes and compensate victims.

"The state is building in recidivism," he said. "The maintenance of strong family ties helps prevent future crimes. All this imprisonment on the Mainland is really self-defeating. Most of those inmates are going to come back to the Islands again at some point, and what are they going to do?"

Reach Johnny Brannon at 525-8070 or jbrannon@honoluluadvertiser.com.