Bills to support both aquarium projects pending in state Legislature
By Andrew Gomes
Advertiser Staff Writer
Two simultaneous proposals to build "world-class" aquariums on O'ahu are advancing after plans were unveiled last year, but both still require key support from the state.
One plan, by Ko 'Olina Co. for a facility at the largely undeveloped West O'ahu resort, needs legislative approval for state tax credits.
The other, by Kajima Urban Development for an aquarium in Kaka'ako, needs a ground lease from the state Hawai'i Community Development Authority, and is asking legislators for approval to issue revenue bonds.
The Ko 'Olina project would be paid for with $75 million in special-legislation tax credits to refund the development cost shared by companies that have, or plan to build, hotels and time-shares at Ko 'Olina, including Marriott and possibly Hilton, Outrigger and Intrawest Corp.
Two bills in the Legislature that would authorize the tax credit were passed unanimously by tourism committees in both houses. Last week, the Senate money committee recommended approval, while the companion House bill is headed for a money committee vote.
The $200 million to $250 million Kaka'ako project, which includes an aquarium and research buildings, would be financed using $40 million in revenue bonds, perhaps $10 million to $15 million in tax credits under the state's Act 221 high-tech development incentive and a balance of private investors and donations.
The revenue bond legislation was unanimously passed by initial committees in both houses, and are scheduled for hearings before money committees.
If approved, the bonds would be issued by the state, which would act only as a conduit, with no responsibility for the debt, according to Kajima, which said the bonds would be guaranteed by the company, an affiliate of Japan's $15.5 billion Kajima Corp. construction firm.
Kajima also is negotiating with the state Hawai'i Community Development Authority for a 50-year lease on 10.4 acres, and wants negotiated ground rent for the complex except parts used by UH, which would pay $1 a year under the proposal.
Jan Yokota, authority executive director, said negotiations had been going "very well" and she hoped to have a development and lease agreement in the next couple of months.
Approval of a development agreement and lease would be subject to a vote by the authority's 11-member board, four of which are state department directors appointed by Gov. Linda Lingle, a strong supporter of the Ko 'Olina aquarium plan.
Marvin Suomi, Kajima Urban Development president, said he believed politics would not dictate whether Kajima's proposal was approved.
Lingle has taken no position on the Kaka'ako aquarium proposal, according to a spokesman for the governor, who helped draft the Ko 'Olina tax-credit bill.
Ko 'Olina aquarium developers said the facility, hotel and time-share projects attracted by an aquarium would spur $700 million in commercial development over 10 years, generating $186 million in tax revenue, 10,000 construction jobs and 2,000 permanent jobs.
As proposed, the Ko 'Olina aquarium would be built debt-free on land donated by The Harry & Jeanette Weinberg Foundation, which after 17 years would give the state half of any net proceeds from the aquarium.
Florida-based development and planning firm EDSA has agreed to build the aquarium. International firm OLIO would operate the facility.
In Kaka'ako, the Kajima aquarium would help attract retail, residential and commercial developers to an industrial waterfront area the state has been trying to revitalize for decades.
The aquarium would replace the Waikiki Aquarium and be operated by a nonprofit agency, possibly UH, which supplements the Waikiki Aquarium's 40-person staff with 13 researchers, saving the facility $440,000, or 20 percent of its annual $2.2 million budget.
Kajima would build the complex. Charles Davis, a principal with Esherick Homsey Dodge & Davis, the architectural firm that designed the Monterey Bay Aquarium, is working with Waikiki Aquarium officials to design the Kaka'ako aquarium.
Research space rent, in addition to aquarium revenue, would help pay off the project's debt, Suomi said.
More details are expected for both projects in coming months.
Reach Andrew Gomes at email@example.com or 525-8065.