Posted on: Tuesday, June 7, 2005

EDITORIAL
Reviewing city assets a sensible approach

The mayor made a smart move toward improving Hono-lulu's fiscal health by forming a team that can take careful stock of city properties. Assigning an asset-management panel that can assess the city's real estate holdings is a rational way to see that O'ahu taxpayers' interests are served by putting city property to its best use.

That approach is a welcome departure from the piecemeal decision-making of the past that too often was drenched in politics. One result of such poor planning was the city's fire-sale unloading of the downtown Block J property more than a year ago. The controversy led to wrangling over other real estate interests. And voters ended up with no confidence that public property is being managed well.

That makes Mayor Mufi Hannemann's move all the more encouraging.

The newly formed Asset Management Review Team is composed of business professionals and headed by General Growth Properties executive Jeffrey Dinsmore. Their proposals must be openly discussed, of course, to make sure the decision serves taxpayers ahead of individual businesses or private interests.

While it's impossible to entirely divorce the process from politics — note that one of the team members is Hannemann's early choice for managing director, John Reed — keeping the review transparent is the best way to protect and ensure the public interest.

The team will likely make recommendations from a business point of view on whether properties should be kept or sold, and that makes sense. But the administration and council also must think beyond that. While promises of short-term profits are alluring during tight fiscal times, the city must opt for prudent long-term public policy and stability.

True, in some cases, selling would be the wisest course, given the current hot real estate market, but a longer view must be taken in others. The team also should explore openings for public-private partnerships that could generate a sustainable revenue stream for the city, as well as ways to encourage affordable-housing development, one of our most critical needs.

Property management must be seen as only one piece of a comprehensive fiscal policy. And a sensible review of the city's real estate assets — with a long-term sustainable future in mind — is clearly the right approach.