State calls for more details on Piers 5-6
By Andrew Gomes
Advertiser Staff Writer
The state yesterday told a development team proposing to build a $200-million-plus waterfront commercial complex adjacent to Aloha Tower that it needs more detailed financial information for the project before it considers negotiating a long-term lease at Piers 5 and 6.
Rainbow Pier Development LLC wants to build a ferry terminal with intra-island and interisland service, 1,500 parking stalls, a 172-room hotel, a 136-unit time-share, a 210,000-square-foot office building, restaurants and a fitness center.
Rainbow Pier made a presentation yesterday to the Aloha Tower Development Corp., the state agency controlling development of the Honolulu Harbor waterfront around Aloha Tower.
In hopes of demonstrating its capabilities, Rainbow Pier principals told the agency's board that it has partnered with California development firm James Ratkovich & Associates and attracted the interest of Starwood Hotels & Resorts, which Rainbow Pier said is considering developing the time-share and co-developing the hotel at a cost of between $70 million and $100 million.
Rockville, Md.-based Intercontinental Commerce Corp. is also interested in providing $150 million in financing for the project, according to Peter Maher, Rainbow Pier's chief financial officer.
Other partners in the Rainbow Pier group include the Hawai'i Convention Center contractor team PCL/Nordic Construction, local construction management firm CM&D, and Honolulu-based architectural firm Wimberly Allison Tong & Goo.
Rainbow Pier submitted preliminary projections that the $227 million project on 7 acres would generate $23 million in net profit after "stabilization" and $2 million in annual ground rent payments to the state.
But as of yesterday, financing was not firm. Rainbow Pier Vice President Wayne Vieira said no lender would commit to the project without a commitment from the state to negotiate a ground lease.
Agency program specialist Dan Orodenker said the local development community's sense is that the Rainbow Pier project is financeable, but he and other agency staff were concerned by a lack of detailed rent projections, cash flows and debt payments as reasons they urged board directors to hold off on any exclusive ground lease negotiations.
The agency also raised the possibility of issuing a request for proposals, which, if issued, would preclude exclusive lease negotiations with Rainbow Pier but could perhaps attract competing development proposals.
Rainbow Pier officials, who noted that no one else has expressed interest in developing the site since they announced their plan in February, said they would try to address the agency's concerns within 30 days. A meeting was set for mid-July to reconsider the lease negotiation issue.
