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The Honolulu Advertiser
Posted on: Thursday, June 29, 2006

Harbor project clears a hurdle

By Andrew Gomes
Advertiser Staff Writer

A private plan to develop condominiums for residential, time-share and possibly hotel use on state land at Honolulu Harbor yesterday won a subcommittee endorsement from directors of a state agency considering the proposal.

Three members of the Aloha Tower Development Corp., including the deputy director of the state Department of Transportation, Harbors Division, recommended that the full board accept the ambitious project at piers 5 and 6 diamondhead of Aloha Tower.

Dubbed Pacific Quay, the estimated $300 million plan by Texas developer Ken Hughes includes 300 condo units, 75,000 square feet of retail and restaurant space, a public pedestrian promenade along the water's edge and 850 parking stalls.

Nearly 500 of the parking stalls would help cure a shortage plaguing Aloha Tower Marketplace. Of the condos, perhaps 60 to 80 may be dedicated as a boutique hotel, while others are proposed for an upscale version of time-share where owners typically have use of a unit for four weeks to three months.

Barry Fukunaga, Transportation Department deputy director, told other board members that the subcommittee, which studied the plan closely and collected feedback from constituents, views the project as viable and desirable.

"We think this will be a significant addition to the Aloha Tower complex," Fukunaga said. "We strongly recommend its acceptance."

The other subcommittee members were Bob Masuda, deputy director of the state Department of Land & Natural Resources, and Neal Otani, president of produce wholesaler Y. Fukunaga Products Ltd.

"We all sat down and thought it was the best thing for us to go ahead with the project," Otani said.

The full seven-member board is expected to vote on the plan at a meeting scheduled for July 26.

If approved, agency staff would begin negotiating a detailed development agreement that would specify how much lease rent the state would receive, among other things.

Other details that would need to be agreed upon likely include who would pay for proposed traffic improvements along Nimitz Highway, how to ensure public access to a waterfront promenade and rules for accommodating boats at the piers.

It is anticipated that negotiations could take six months if the board approves the plan next month.

If the project is realized, it would be a major step for state officials in a long effort to make better use of prime state land at the harbor.

The agency in the late 1980s selected a previous developer's plan for a hotel, festival marketplace, condos, office building and ferry terminal from piers 5 to 14.

But the $700 million project stalled in the early 1990s after completion of the $100 million Aloha Tower Marketplace that has struggled, in part because planned phases with more parking were not built.

The agency regained development rights for the land in 2000, and has been trying to find someone to finish redevelopment.

In 2002, the agency issued a request for development proposals for the piers 5 and 6 site, which is mostly a parking lot. Agency board members embraced an initial plan by Hughes that called for loft apartments and a hotel.

But over the past three years, Hughes repeatedly expanded and modified his plan, which at one time involved selling state land for fee-simple condos, and a downtown electric trolley system.

Now Hughes is seeking a 65-year lease from the state and concentrating on piers 5 and 6.

"We're finally getting progress to a big dream that was put on hold for awhile," Fukunaga said.

A potential second phase of the vision by Hughes involves redeveloping piers 10 and 11 with a rebuilt cruise terminal building, state offices, parking and 250-room business hotel designed with an iconic profile in the shape of a cruise ship.

Other second-phase plans are to remove parking spaces from Irwin Park and continuing discussions with Hawaiian Electric Co. to move its downtown power plant to make room for a park.

The agency board expects to consider pursuing the second phase plan at some future time.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.