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The Honolulu Advertiser
Posted on: Thursday, January 2, 2003

ISLAND VOICES
City tax break for project justified

By Romy M. Cachola
City Councilman

Contrary to what critics have claimed about proposed tax breaks for a telecommunications firm project in Central O'ahu, Sandwich Isle Communications' request to expand the Wahiawa-Mililani Technology Park Enterprise Zone (EZ) did not result in new zoning changes.

For the record, enterprise zone coordinator Paul Kobata has stated that the proposed parcels are eligible for EZ participation.

Furthermore, the City Council did not change the rules of the game, as suggested by the Tax Foundation of Hawai'i, nor were there any questionable motives for approving Sandwich Isle's request. The council's actions are also not unprecedented, given that prior councils approved expansion of enterprise zones in the North Shore-Ko'olauloa and 'Ewa-Central O'ahu areas.

Here are the main reasons the council approved expansion of the Wahiawa/Mililani Enterprise Zone by an 8-1 vote:

  • On Jan. 24, 2001, this council unanimously supported the state Department of Hawaiian Homelands Telecommunications Infrastructure and Service Project. Sandwich Isle, a rural telephone company licensed by DHHL to provide telephone and broadband services to its properties statewide, has proposed building a $22 million network operations center in Mililani and furnishing $30 million for equipment.
  • On April 25, 2001, the Mililani Neighborhood Board voted to support Sandwich Isles' proposed network operations center because of the many new jobs it would provide.
  • The city's Department of Planning & Permitting has already approved a conditional-use permit for Sandwich Isles.
  • Expanding the enterprise zone to include the subject parcel would attract new businesses into the area.
  • The land for the network operations center sits outside of the prime agricultural designation.
  • Under the Enterprise Zone Program, the city provides tax incentives only on new construction, and property taxes still have to be paid on the land.
  • Although the state's high-tech tax incentive, attracts new, out-of-state businesses to Hawai'i, we should not neglect to provide similar tax incentives to local businesses such as Sandwich Isle.

The council's actions will provide a much-needed shot in the arm for the economy and help local businesses.

City Councilman Romy M. Cachola represents District VII.