Harbor project revised to feature more low-rise lofts

By Andrew Gomes
Advertiser Staff Writer

A Dallas developer proposing to create a residential community with streetcar connections from Piers 2 to 6 at Honolulu Harbor yesterday estimated the cost of his ambitious project at about $360 million and said he'd like to have a development agreement with the state by July.

Ken Hughes of UC Urban also refined his master plan, eliminating hotel and office high-rises, and increasing the number of low-rise residential loft rentals from 250 to 550.

Hughes shared the latest details of his proposal with the state Aloha Tower Development Corp., which owns most of the property considered for redevelopment and is helping finance up to $200,000 of exploratory study costs as part of a preliminary agreement with Hughes.

The developer said he remains optimistic that he can overcome three otherwise "fatal flaws" — moving Hawaiian Electric Co.'s power plant, creating a downtown streetcar system compatible with city and state mass-transit plans, and providing parking for Aloha Tower Marketplace.

Other hurdles include arranging to use Coast Guard property at Pier 2, negotiating lease terms with the state and financing.

The agency board has one month to decide if it wishes to continue working with Hughes and start negotiating a development agreement.

Hughes said if he is successful, construction could begin two years from now at the earliest and take two years to complete, though the park could take up to six years because of the need to move the power plant.

Hughes broke down cost estimates for pieces of the project, dubbed Pacific Quay:

• $224 million for three connected low-rise residential apartment buildings on top of 50,000 square feet of retail and restaurant space.
• $19 million for two parking garages with 1,400 spaces, which would be owned by the state and on site and at Piers 1 and 2.
• $30 million to demolish and clean up the power plant property.
• $22 million for park construction, which includes taking the parking lot out of Irwin Park.
• $54 million for a 2.4-mile electric streetcar loop connecting the project with the downtown business district.
• $9 million to build a state Transportation Department Harbor's Division office building.

Hughes estimated that the project would create about 3,000 jobs and have a 10-year economic impact of $571 million.

Hughes said he is considering a range of potential financing options, including federal funds, business improvement district assessments, state bonds and tax-increment financing.

Fremont Realty Capital, a unit of San Francisco-based private investment company Fremont Group, has expressed interest in providing debt and equity financing for the project, Hughes said.

Reach Andrew Gomes at agomes@honoluluadvertiser.com or 525-8065.