Kaka'ako contracts disclosed

By Johnny Brannon
Advertiser Staff Writer

The University of Hawai'i has spent nearly $40 million on a major medical-school complex under construction at Kaka'ako but has yet to nail down a master contract for completing the project.

UH released public records detailing the expenditures only after the state Office of Information Practices determined there was no legal basis for denying The Advertiser's request that documents be disclosed.

The university had argued that it could be harder to negotiate the main construction contract with Hawaiian Dredging Construction Co. and Kajima Construction Service if it became clear how much had been spent.

The records show that UH's contracting arm, the Research Corporation of the University of Hawai'i, has agreed to pay more than $21.8 million to the Hawaiian Dredging/Kajima joint venture through other contracts and change orders.

Additional large contracts include a $10.6 million deal with Architects Hawai'i Ltd. for design and engineering work, and a contract and change orders worth $3.6 million for insurance coverage and evaluations by the Atlas Insurance Agency Inc.

Several smaller contracts with other firms bring the total to $37,394,481. Legal representation, auditing and other ancillary services add another $2,196,876, bringing the total to $39,591,357.

UH says the John A. Burns School of Medicine and linked projects comprising a Health and Wellness Center will cost about $300 million altogether. But some lawmakers have expressed concern that fund raising for the project will fall short.

The first phase of the work includes an education and administration building and a research building, together providing 345,000 square feet of facilities. It is scheduled to be completed by fall of 2005.

UH hopes to finish cost negotiations and sign the main contract with Hawaiian Dredging/Kajima by the end of September, said Carolyn Tanaka, UH associate vice president for external affairs.

The change orders approved do not reflect cost overruns, and the negotiations are proceeding on schedule, she said.

The main construction contract was split into segments so work could begin while costs for the rest of the project are decided, and the change orders cover the first segments, she said.

"One of the priorities of the project was to get construction moving and get people working as one of the post-9-11 remedies of the expected drop in the economy," Tanaka said. "We could get moving quicker and they could start getting things done."

The state has committed up to $150 million for the medical school, backed by $163 million in bonds. UH hopes to raise another $150 million in private donations, including $90 million for a cancer research center in Kaka'ako and $60 million to renovate the university's Manoa campus medical school.

The nonprofit University of Hawai'i Foundation has so far raised $709,000 for the cancer center and $4.2 million for the renovation.

A group of Japanese pharmaceutical companies is also considering a plan for a $100 million disease research complex in Kaka'ako in conjunction with the cancer center.

Rep. K. Mark Takai, chairman of the House Higher Education Committee, said UH should not expect a state bailout if private donations are lacking.

"That will not happen," said Takai, D-34th (Pearl City, Newtown, Royal Summit). "The commitment by the university to the Legislature was that if we gave them $150 million, they would come up with the other $150 million. That was the deal."

But information about how public money is being spent on the Health and Wellness Center has trickled out slowly.

Research Corporation of the University of Hawai'i director Harold Masumoto refused in June to release any documents related to the medical-school construction contracts, despite a request under the state's public records law, the Uniform Information Practices Act.

UH officials later overruled that decision and released consultant and construction contracts to The Advertiser but deleted cost figures from many of the documents.

"It's mind-boggling that on one hand the UH administration says transparency is important, and there are these problems obtaining public information," Takai said. "What the university says and what they're doing doesn't add up."

The university had invoked an exemption in the law that allows government agencies to withhold public records if their release would "frustrate a legitimate government function," in this case the final contract negotiations with Hawaiian Dredging/Kajima.

But the Office of Information Practices found that when creating the law, the Legislature had specifically intended that certain records be public as a matter of policy, and not subject to the broad exemption.

"We are simply unable to interpret the statute as permitting any exception to disclosure of the contracts," OIP director Leslie Kondo wrote in a July 30 letter to UH lawyers that called for the release of uncensored contracts.

The university had also argued that since all the contracts related to one project, they should be considered as one and the details not be disclosed until the final deal with Hawaiian Dredging/Kajima is signed.

But the OIP found "nothing in either the statute or the legislative history to support UH's argument. We also cannot conclude that such an interpretation would be consistent with the statute's stated policy of ensuring that government is conducted as openly as possible."

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