Hanauma visitor center $6 million over budget

By Suzanne Roig
Advertiser East Honolulu Writer

The new Hanauma Bay Marine Education Center and accompanying improvements cost $16.2 million, about $6 million more than the original price tag, according to city figures released yesterday for the first time.

Officials of Mayor Jeremy Harris' administration have said the center cost $13.1 million, but that figure did not include design and planning costs.

City Council budget committee chairwoman Ann Kobayashi said the new figures, which some council members had sought for months, give a truer picture of the project's costs.

Other figures presented yesterday to the budget committee show higher-than-expected debt service and operating expenditures, raising questions about the center's ability to sustain itself as planned.

Councilman John Henry Felix, who represents the East Honolulu area that is home to the project, called the figures "runaway costs" and described the project as "disappointing and sad and a costly misadventure."

Kobayashi, who had vowed to confront the Harris administration about the cost overruns, called the project accounting "a mess" and said she will follow up with additional meetings until all the facts are out.

"There are still so many unanswered questions," she said.

Eric Crispin, deputy director of the city Department of Design and Construction, defended the project at the budget committee briefing. "It's a complex project on a sensitive site," he said. "The facilities were redesigned twice and the second time in a short amount of time so we could put the project out to bid before the funds lapsed."

The project was supposed to cost $10.6 million to build, but expenditures rose 23 percent because of more than two dozen change orders approved by the administration. City officials have said that even with the change orders, the project was within the amount budgeted by the City Council for construction.

The education center opened to rave reviews last month. The city has said the center is essential to educate visitors and protect the fragile preserve that draws more than 1 million visitors a year.

But as more details have emerged, even some supporters have questioned the expenditures.

"The project was largely driven by considerations of the calendar and financing, rather than planning and product," said Dick Baker, former president of the Friends of Hanauma Bay, a volunteer education group that was one of the project's strongest supporters. "Financial discipline was lax. There was — and is — no financial plan for the project or the preserve."

One of the staunchest opponents of the project, the East Honolulu Community Coalition, said more financial reviews might reveal that the price tag is even higher.

"It's real frustrating to hear the Friends of Hanauma Bay and the City Council repeat the questions we've had since 1999," said group spokesman David Washino.

At yesterday's briefing, the city's acting director of Budget and Fiscal Services, Chris Diebling, said debt service on the project and improvements to the nearby Koko Head District Park and botanical gardens will be running at a $500,000 loss. But by afternoon, Diebling revised his figures downward by $100,000. He also said that this year the shortfall will be covered by a $500,000 surplus from previous years.

Each year, Hanauma Bay brings in about $3.2 million in revenue used solely to maintain and operate the bay, Koko Head District Park and the Koko Head Botanical Garden. Debt service on the bonds used to pay for the bay improvements cost an estimated $500,000 a year and the cost to operate and maintain the bay is about $3.1 million, Diebling said.

Later, city spokeswoman Carol Costa clarified what Diebling had said. "We're sure the revenues are adequate to pay for the operation, maintenance and debt service in 2003," said Costa. "We're hoping revenues from the parking lot and the concessions will go up in the future."

Council members said they were especially troubled that even when they raised questions, the project continued to grow in scope and expense. "The lesson we've learned here in the past couple of months is that we gave the city a blank check of $13 million and they're going to do what they're going to do," council chairman John DeSoto said at the briefing. "Never give anybody a blank check."