Questions about whether the Aloha Tower Development Corp. should be disbanded are being raised again, both in a state auditor's report and a bill progressing through the Legislature.

The auditor's report was released yesterday and recommends the agency be abolished, with its responsibilities split between the state Harbors Division and the Hawai'i Community Development Authority.

"After 30 years of effort, the corporation has managed to complete only one phase of its original mixed-use development plan — and that development, the Aloha Tower Marketplace, is struggling," said the report.

"Without its component parts, the marketplace generates far less than was expected and has been unable to realize its projected financial benefits for the state — over $4 billion over 65 years."

The development corporation was established in 1981 to oversee commercial redevelopment of a portion of Honolulu Harbor. Its past plans have included having an international business center, hotel, condominium and sufficient parking in the Aloha Tower area.

But it has come under fire in recent years for falling short of its financial and development goals. It also has had some missteps resulting in lawsuits.

The Legislature in 2009 heard bills to shut down the agency and this year is considering a task force to study the feasibility of shutting it down.

The agency's executive director, however, said detractors are dwelling on past history and aren't recognizing work that's being done currently to meet development goals.

"One of the things about the (auditor's) report that we object to is that it isn't a balanced report," said Sandy Pfund, executive director. "It mostly talks about the past 30 years."

She said the agency and its board have been working on solutions to development roadblocks, such as expanding the small development area by filling in 7.3 acres of harbor between piers 6 and 8. It also has been working with its board on trying to clean up past litigation while looking at its future options.

The development issues, Pfund said, won't disappear if these functions are transferred.

"We think their recommendations are a little bit short in terms of what should be done," she said.

Pfund said the report also ignores progress made on a Harbors Modernization Plan. She said the agency is specially funded — meaning shutting it down won't help with general fund budget problems.

The report said the agency's work on harbor infrastructure improvement projects has little to do with its core redevelopment mission.

"Burdened by a litany of lawsuits and with an underperforming marketplace as its sole accomplishments , the corporation is unlikely to succeed," the report said.

"The corporation has not addressed long-standing constraints to development and cannot justify its continued existence through harbors work."