Power plant move explored

By Andrew Gomes
Advertiser Staff Writer

Sandwiched between the blue-green waters of Honolulu Harbor and sleek downtown high-rises, the Leslie A. Hicks Power Plant near Aloha Tower has been called both an eyesore and essential.

Engineers monitor a turbine inside the downtown Honolulu power plant, which sits on a prime piece of land near Aloha Tower. Photo courtesy of Hawaiian Electric Co.

Perhaps never more than now have pressures pulled in opposing directions: a desire to eliminate the ugly beige industrial complex vs. a growing and costly need for electric power.

As HECO warned last week that a potential power shortage in the next decade looms over O'ahu, a visionary Dallas developer and the state plotted how to rebuild a modern equivalent of the Aloha Tower power plant in a more industrial, yet still central, setting.

"This needs to be done," said Ken Hughes, the developer partnering with the state to redevelop several acres of state property around Aloha Tower Marketplace. "It has been endlessly studied and recommended, and we are only the latest messenger, not the first."

Several previous ideas to remove the downtown plant, including two by HECO, were considered in the late '80s and early '90s in response to the state's invitation to redevelop land surrounding Aloha Tower. But none was realized.

The latest attempt is a linchpin in an ambitious $300 million plan by Hughes to create a residential community with loft-style condominiums at Piers 5 and 6 tied to a downtown streetcar system.

The 3.5-acre power plant site would become a park connected to an improved Irwin Park as a kind of central business district front lawn that Hughes describes as a "crowning urban amenity."

Hughes' overall redevelopment plan, which would share revenues and expenses with the state in a public-private partnership, faces other hurdles. One is persuading the Legislature to issue an estimated $150 million in taxpayer-financed general obligation bonds to pay for the public-improvement parts of the project. But the power plant looms as perhaps the biggest obstacle.

"This is a complex, broad-based project with a whole hell of a lot of different components — but it is doable," said Dan Orodenker, executive director of Aloha Tower Development Corp., the state agency partnering with Hughes.

Replacing the downtown plant will require careful assessment of environmental rules, community considerations and costs that would be paid by taxpayers, electricity users and HECO.

Leading the relocation effort is the development authority. That gives the initiative a backing that previous efforts didn't have. But relying on public support and financing also presents a challenge to the already immensely difficult task.

The development authority is studying five or six sites, primarily state land between Pearl Harbor and Kaka'ako on which to put a new plant. Orodenker said it would be premature to identify locations.

The assessment so far has focused on understanding federal restrictions governing power plants. "You cannot put 200-foot smokestacks by the airport," Orodenker noted.

Connecting the plant to the power grid is another consideration. HECO prefers a replacement plant to be near the core of power consumption (downtown businesses) because less power is lost in transmission.

Even after a site is selected, a yearlong study of wind activity would be required, as would an environmental impact study. Community concerns also would have to be addressed.

The cost of a new plant, estimated at a little more than $100 million, would need to be determined, then approved by the state Consumer Advocate and Public Utilities Commission.

The cost of building a new plant is not included in Hughes' $300 million estimate for the greater redevelopment project. The greater plan budgets $30 million for demolishing the power plant and cleaning the site, which may qualify for federal funding. Park construction is budgeted at $22 million, which includes removing the parking lot from Irwin Park. A land swap could avoid property acquisition costs.

Hughes' timetable calls for a 2005 demolition of the power plant's 'ewa wing, which houses a maintenance shop, environmental staff offices and decommissioned generation units.

The diamondhead building with the operating generators would be taken down in 2008, with a replacement plant in operation, according to the development timetable. "Nothing seems to be (unachievable) at all," Hughes said.

But there appears to be little public demand for a park at the site.

"Why should you build another park that will cost us more money?" asked downtown office worker Sheila Pagaduan. "Hello-o? We need to fix the roads and put more money into the schools."

Pagaduan, however, does agree that the windowless complex with black-tipped exhaust stacks, oil tanks and high-voltage warning signs appears out of place next to Aloha Tower Marketplace, the Hawai'i Maritime Museum, cruise ships and other visitor-oriented attractions.

"It would definitely be more scenic not to have it there," said Massachusetts resident Cheryl Korytoski, a first-time visitor to Hawai'i.

Korytoski's husband, David, who was sitting outside the Maritime Museum last week, could hear the plant's whirring. "It's sort of noisy," he said. "You definitely hear the generators."

Not everyone knows that the complex at 170 Ala Moana named after a former HECO president is a power plant, including some kama'aina who work downtown and guessed that the facility was a factory, a warehouse and a water filtration plant.

"It looks like a sewage treatment plant," said Gene Dominguez, a downtown denizen who has a birds-eye view of the plant from his office.

Like his colleague Pagaduan, Dominguez doesn't favor replacing the plant with a park. He suggested painting the buildings and tanks creatively to resemble an aquarium or some other aesthetic attraction.

Other people, including tour bus drivers and a stevedore, said they feared a grand park would attract the homeless to the downtown waterfront. They said the state's Kaka'ako waterfront park was sufficient.

Still, many people agree that the power plant needs to go. They cite security concerns with having a potential terrorist target at the foot of Honolulu's business district, pollution and blight.

HECO at one time was among those in favor of retiring the plant, which dates to 1894 and was replaced with the existing generation units in 1954 and 1957.

In 1989, a HECO subsidiary partnered with local developer Jack Myers to bid on the state redevelopment opportunity to remake 17 acres of state land around Aloha Tower.

The $1.1 billion proposal by HECO and Myers, which used the power plant site, was to develop three condo towers, three office towers, a hotel and an 80-meter-high whirling column of water spouting from the harbor.

The HECO/Myers bid, one of four competing proposals, wasn't selected. But in 1990, the team announced it would redevelop the power plant site alone. The plan was for a condo or hotel or a combination tower possibly with offices.

HECO won approval from the Consumer Advocate to sell the power plant site to the partnership for $32.7 million, which would have generated a $36 rebate for a typical residential power customer because there was no plan to replace the plant.

At the time, HECO had lighter demand for power, plus plans to obtain additional power from independent producers.

However, in 1993, after the state's economy had started its slide into a decade of stagnation, HECO aborted the project and withdrew its pending application from the Public Utilities Commission.

HECO spokeswoman Lynne Unemori said the declining real estate market and the ability to continue operating the downtown plant efficiently were behind the decision. "The economics just didn't pan out anymore," she said.

Since then, HECO has been able to upgrade the plant and extend its expected useful life to 2024 and possibly longer.

"In general, it is much more cost-effective to modernize an existing unit and keep it operating than to retire the unit and replace the capacity with a new generating unit," HECO said in a 1998 regulatory filing, noting that it would cost $17.4 million in 1997 dollars to modernize the downtown plant compared with $64 million to build a new one.

Fuel is not much of an economic factor, according to HECO, which said said any new power plant would likely burn more expensive but more efficient and cleaner-burning fuel, compared with the cheaper, higher polluting but less efficient fuel used in the downtown plant.

Hughes said that even though it takes less effort to keep the status quo, it is not civically responsible to do so. "The removal of this plant from the waterfront is in the best long- and short-term interest of Honolulu," he said.

HECO is agreeable to replacing the downtown plant, and is sharing information with the state. But it will be largely up to the development authority and the Gov. Linda Lingle administration to find a viable solution for the utility, the state, the developer and the public.

"It is a very exhaustive process, but it can be done," Orodenker said.

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