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Sunday, April 12, 2015
Alii Place: Where Will the $90M Come From?
By Sen. Sam Slom @ 4:49 AM :: 4965 Views :: Hawaii State Government

Senate Ways and Means Committee approves bill to facilitate State purchase of Alii Place

News Release from Office of Sen Sam Slom, April 10, 2015

HONOLULUOn Monday the Senate Ways and Means committee approved HB1366 SD1[1] with amendments that will facilitate preliminary steps of a State purchase of Ali‘i Place, a building that boasts 330,000 square feet of prime office space in downtown Honolulu.  However, many major questions remain, including how the estimated $90 million value was assessed, how the purchase of the leasehold interest will be funded, and how other costs such as maintenance will be addressed.

Following up on his sole 'no' vote in Ways and Means (WAM) on Monday, Senator Sam Slom says, "What is troublesome is the lack of transparency, and how this measure has been fast tracked and passed out of committee.  Although I agree with an intent to reduce the amount of money that state agencies are currently paying for private office space, there has been no negotiation, no audit of what state-owned office space already exists or could be sold to raise capital funds for this purchase.  Years ago, the Senate Minority asked for an accounting of state owned assets, and we have yet to receive a response.  Yet taxpayers are supposed to just sit back and stay quiet as state debt is extended yet again.  The Senate Minority is opposed to increasing state debt at this time, when we are having so much difficulty just balancing the budget."

The purpose of the measure originally introduced January 29, HB1366[2] was to "identify, plan, and acquire or build upon real property in Honolulu" but made no mention of Ali‘i Place.  That measure passed untouched out of the House, and was referred to the Senate committee on Government Operations. The version of the measure that passed out of that committee, HB1366 SD1[3] still made no mention of Ali‘i Place, and then moved on to WAM. After one public hearing on April 2, WAM adopted HB1366 proposed SD2[4] on April 6, to approve general fund appropriations totaling $12.25 million over the next two years to pay for associated costs of acquiring the building.

Senator Slom continues, "It is completely unacceptable that millions of dollars have been committed to this eventual purchase, when no one has asked any real questions yet.  For starters, where will that $90 million come from?  Will the governor include it in the CIP budget which we have yet to see? Does the legislature plan to authorize general obligation bonds?  Secondly, why has no one addressed maintenance and operation costs, CAM [common area maintenance]and the cost of renovations to house the various state departments? Finally and most importantly, what is the length of the ground lease and how much investment value does this particular property have? "

The state also owns the Princess Victoria Kamamalu Building and the Hemmeter Center.  The Kamamalu Building was similarly purchased to provide office space for state workers, but has sat vacant since 2003 because the funds set aside by the legislature for repairs in 2005 were not enough.  This was partly due to the recession and because cost estimates to remove asbestos and make other needed repairs doubled[5].

Senator Slom says, "We should have learned something from the Kamamalu Building, which is just now getting the needed funding to complete renovations, to the tune of $25 million. That is double what the legislature planned for in 2005. We should have learned that there are always hidden costs, and that we should not be rushing a purchase of this size."

Senator Slom also has concerns over the lack of information regarding availability of parking for the public once the state takes over Ali‘i Place, well known to be one of the only affordable places to park in downtown.  Members of the public who need to go to District Court or come to the Capitol to testify for the public in hearings often park in Ali‘i Place.  

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