Posted on: Thursday, May 29, 2003

Ko Olina tax-credit bill to be signed

By Bruce Dunford
Associated Press

Gov. Linda Lingle planned to sign into law today a bill giving a $75 million tax credit over 10 years for construction of a "world class" aquarium as a catalyst for development at the Ko Olina resort in West O'ahu, a spokesman confirmed yesterday.

Lingle was scheduled to give welcoming remarks at the Marriott Travel Partners conference this morning at the Ihilani Resort in Ko Olina and would use the occasion to sign the bill, said her spokesman, Russell Pang.

The Ko Olina bill was the subject of a rare public showdown between House and Senate leaders over tax credit measures in the closing days of the 2003 legislative session that ended May 1.

Lingle has indicated she likely will veto the other bill, which would extend the hotel construction and renovation tax credits adopted in a special session soon after the Sept. 11, 2001, terrorist attacks in New York City and Washington, D.C.

She objected to the extension bill being expanded to also apply the tax credits to commercial construction in a resort area, saying that would result in an unanticipated drain on already tight tax revenues.

Lingle said the revenue impact of the Ko Olina tax credit was already taken into account in her financial plan to balance the state budget.

The hotel tax credit is sought primarily by the hotel chain Outrigger Enterprises for its planned $300 million redevelopment in Waikiki, including a first phase primarily involving commercial construction.

Senate negotiators of the bill accused the House of slipping a provision in the final draft of the bill to give the tax credit to commercial construction and moved to kill the bill, saying it would cost the state too much in tax revenues.

The House retaliated by holding the Ko Olina bill hostage until the Senate let the hotel construction bill go to the floor where it was approved.

Ko Olina developer Jeff Stone says the aquarium project will stimulate resort development worth $700 million, creating 10,000 construction jobs, 2,000 permanent jobs and $186 million in new tax revenues over 10 years.

The Legislature passed a Ko Olina tax credit bill last year, but it was vetoed by then-Gov. Ben Cayetano, who said it would be a windfall for developers and companies that have already committed to building in the resort area.